Pages 4 to 5 Location cost factors within each state (2)

LOCATION COST FACTORS Overvi ew The Location Cost Factors provide a way of estimating construction cost differences across Australia, from the capital cities to rural and remote areas. Average construction costs have be en ca lculated fo r a total of 101 regional centres, represented as a ratio of cost ag ainst the major capital cities. Each location cost factor is determin ed using economies of scale, using statistics from the Australian Bureau of Statistics (ABS), GIS mapping (Geographic lnfom,ation Systems), Cordell's database of construction costs and mathematical formula that represent standard methods of construction. The location cost factors are comparative estimating tools that take into account the logistical requirements of bu ilding in regional and remote areas. The location cost factor does no t account for cost variations due to specific building codes or requirements for a local region, v ar iations between different trades, differences in demand caused by fluctuating local conditions and management practices. As the factors are calibrated against the cost of an average house their accuracy is t he highest when used on a standard house build and therefore is the least. accurate when used on a single item. ~ ~~ > • , .f _ •• _-~ .,,.~ f, U sage r . fr. l The location cost factors rep resen t a cost Increase ', , _ relative to t he cost of construction in the capital • ~ •.- city of each state. They should be used with _ __) ' -; - ' 1~· { sta nda rd construct i on costs from cap i ta l ci ty. ft..~-~ - • : '• :· : 1 ~!.( Standard constniction cost x ~, : - · -,. . , Location cost factor = I" · .,.,. ,- .,u ~ Location cos t of con struction '~ ( f---.,..-- - __ ..,. , -:.::t / _,, To convert to a pe r centage move the decimal - location cost factors mapped by postcode acro ss ,l11srralia {T.-011110 high = da de to light) Re gi onal Ce ntr e Dist ribution p lace two places to t he r ig ht. 1.092 = 109. 2% To calculate the increase as an overhead remove 1 from the factor (or 1 00% if us ing pe r ce ntage) . 1. 09 2 = add overhead or o. 092 1. 092 = add overhead of 9. 2% 2. 105 = add overhead cl 110. 5% Regional Centres are distributed across New South Wales as a representation of population dist ri bution. The largest centres of population within a region are chosen to represent that region. Selection of regional centres re fl ects population density, topographical boundaries, transport linkages a nd distance between centres. Where a number of medium to high population centres exist close togeth er in close proximity with a viable transport link connecting them, then one of the centres is chosen to represent that area based on their size or central position, reflecting the regulation of construction costs by competition. The largest city in New South Wales, Sydney, has been nominated as the point from which the regional factors are calculated. A total of 37 regional cen tr es have been researched across New South Wales. Calc ul at io n of Locatio n Cost Factors The location cost factors measure the additional costs incurred when building in different locations across the state, from urban to rur al and remote areas. Cordell uses sophisticated GIS mapping progra ms to map and analyse data across Australia, includi ng transport routes and distances, distribution of building subcontractors, ABS census data an d population density and distribution. Using the data and kno wl edge gained a series of ca lculations are perfom,ed that look at the logisti ca l problems of co nstructing in each regional centre, adding the cost of transporti ng of materials, sourcing labour and building in remote conditions. The calcul at ions are performed on a standard house model that represents an average residential house design. The calculations are weighted by experienced estimators to reflect conditions in the field. Location Co st F acto r by P ostco de A location cost factor has been calculated for every postcode in Australia, providing an effective way of comparing building costs acro ss the country. The locati on cost factors by postcode are available online in Estimator V4 only. All Australian postcodes (with exception of the Cocos & Keeling Islands, and Australian Antarctic Territory) have been assigned to a regional centre and derive a final regional cost factor fro m that centre. Additional calculations on top of the sta nd ard regional locational cost calculation are then performed taking into account the location of postcode in relation to the regional centre and any additional logistical problems, such as an island location, that exist for that postcode. Allocation of each postcode to a regional centre tak es into account: • Approximate distance of the postcode from nearby regional centres. • Transport networks including major roads and highways, bridges, rail, ferries and standard shipping routes. • Topographic fe atu re s including mountain ranges, rivers and coastlines. • Population distribution and density • The ar ea of the postcode and the distribution of any discontiguous areas. Postcodes representing PO Boxes with no distribution area have been mapped to the suburb in which they are situated. LVR (or customer specific) postcodes have not been assigned as they may be operational for more than one geographic loca ti on. L OCA TION COST FACTORS 4 N SW H ousi ng JUN /J U UA UG 2021 Do not copy or share this content.