Is it really that much more expensive to build with an architect? Construction companies usually have one as well, so who is actually planning the house with us?
Hello Sebastian,
An €8.50 minimum wage plus about 40 percent employer contributions, overhead costs, and calculated vacation/sick leave, etc., results in €11.90. A gross cost of €20 for the contractor, including everything, therefore equates to a gross wage for the bricklayer of around €14.30. This is well above the average gross hourly wage in East Germany. So, if the contractor budgets €20 for his own tradespeople, there is a large margin included, which already contains a profit share.
It’s a different matter if you want to employ a bricklayer for one hour who is not working for YOUR company; then there are additional overhead costs involved. You also pay for the accountant, tax advisor, administration, and so on. Moreover, you pay VAT, corporate taxes, and so forth, which easily brings the costs to between €60 and €80.
The general contractor certainly doesn’t pass on all the advantages, that’s correct. But with significantly lower purchasing prices, market power over subcontractors, having their own bricklayers and site managers, and possibly the site manager having signing authority, a large profit margin emerges. The general contractor already makes a profit through their own employees. This large margin is partly retained by the general contractor, but also partly benefits the client. After all, the general contractor is also competing with other general contractors.
Do you have a cost breakdown for your house? That would allow a review. You have picked out a few individual aspects here and there, and those may well be accurate. But what use is it to save €3,000 on the controlled residential ventilation system if the starting price for a basic house at the architect is already €50,000 higher?
An €8.50 minimum wage plus about 40 percent employer contributions, overhead costs, and calculated vacation/sick leave, etc., results in €11.90. A gross cost of €20 for the contractor, including everything, therefore equates to a gross wage for the bricklayer of around €14.30. This is well above the average gross hourly wage in East Germany. So, if the contractor budgets €20 for his own tradespeople, there is a large margin included, which already contains a profit share.
It’s a different matter if you want to employ a bricklayer for one hour who is not working for YOUR company; then there are additional overhead costs involved. You also pay for the accountant, tax advisor, administration, and so on. Moreover, you pay VAT, corporate taxes, and so forth, which easily brings the costs to between €60 and €80.
The general contractor certainly doesn’t pass on all the advantages, that’s correct. But with significantly lower purchasing prices, market power over subcontractors, having their own bricklayers and site managers, and possibly the site manager having signing authority, a large profit margin emerges. The general contractor already makes a profit through their own employees. This large margin is partly retained by the general contractor, but also partly benefits the client. After all, the general contractor is also competing with other general contractors.
Do you have a cost breakdown for your house? That would allow a review. You have picked out a few individual aspects here and there, and those may well be accurate. But what use is it to save €3,000 on the controlled residential ventilation system if the starting price for a basic house at the architect is already €50,000 higher?
S
Sebastian7915 Nov 2015 16:00A bricklayer or any other skilled worker on a construction site will earn more than the minimum wage.
Well, in the far east of the country it might be different in some cases, but most of Germany tends to have higher wages.
No, I just have my total cost calculation on hand, and I am definitely paying less than what you usually hear for turnkey houses here. Why should the "basic house" cost more when ordered from an architect—what exactly is a basic house anyway? You don’t just order a piece of a house from a drawer...
I am not wearing rose-colored glasses; I do see the total costs. By the way, I save more than 300 euros on the controlled residential ventilation system.
Well, in the far east of the country it might be different in some cases, but most of Germany tends to have higher wages.
No, I just have my total cost calculation on hand, and I am definitely paying less than what you usually hear for turnkey houses here. Why should the "basic house" cost more when ordered from an architect—what exactly is a basic house anyway? You don’t just order a piece of a house from a drawer...
I am not wearing rose-colored glasses; I do see the total costs. By the way, I save more than 300 euros on the controlled residential ventilation system.
For example, we have an offer from a local general contractor as well as one from one of the largest prefabricated house manufacturers in Germany. The prefabricated house is simply 75,000-80,000 EUR more expensive. The general contractor's offer does not yet include the mechanical ventilation system (because it is an extra beyond the basic scope of work), while the prefabricated house includes an air-to-air heat pump. If you were to compare both in terms of mechanical ventilation plus underfloor heating, the price difference would hardly decrease. And 75,000-80,000 EUR cannot be balanced out by installing golden faucets. Okay, the U-value of the walls in the timber house is slightly better. But that is just one building component, and in the end, I still prefer solid walls...
Therefore, the statement that you pay less than what is commonly reported here is not very meaningful at first. If you compare it with these large prefabricated house manufacturers, I can believe that. However, the comparison with a local general contractor might look quite different.
Therefore, the statement that you pay less than what is commonly reported here is not very meaningful at first. If you compare it with these large prefabricated house manufacturers, I can believe that. However, the comparison with a local general contractor might look quite different.
S
Sebastian7915 Nov 2015 16:26No, I usually compare myself with local general contractors/builders since I’m more familiar with their prices.
And, of course, with what you see in the forum – obviously, a direct comparison is quite difficult because there are major differences in the details and you can never fully compare everything. But when I read about air-to-air heat pumps or even air-to-water heat pumps, that’s usually enough for me... then decentralized ventilation, no network, two power outlets per room, and so on.
But just the calculations that a construction expert often provides (which I don’t doubt at all) – if I used those as a basis, we would probably be paying five figures more... but we’re not.
And, of course, with what you see in the forum – obviously, a direct comparison is quite difficult because there are major differences in the details and you can never fully compare everything. But when I read about air-to-air heat pumps or even air-to-water heat pumps, that’s usually enough for me... then decentralized ventilation, no network, two power outlets per room, and so on.
But just the calculations that a construction expert often provides (which I don’t doubt at all) – if I used those as a basis, we would probably be paying five figures more... but we’re not.
The minimum wage applies only if there is no industry-specific minimum wage. In construction, the minimum wage for skilled workers is already 14.20 (West) and 10.75 (East) euros. That is why "self-employed" Eastern Europeans or those working under contract agreements often work there...
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