Category: Quantities & pricing
Prepared by Eng. Ahmed Fathy, Projects Manager ·
Definition
A budget estimate is an approximate project cost at concept or early design stage, usually by cost per square metre or by main elements, used for investment and funding decisions and to set the design budget.
Why it matters on a project
It gives the owner an early number to decide on, but it is less accurate than a detailed estimate from the BOQ and should carry a contingency.
Worked example
A 700 m² villa at a budget rate of 3,400 SAR/m²: estimate 700 × 3,400 = 2,380,000 SAR before VAT, with a contingency added for the design stage.
Common mistake
Treating the budget estimate as a final price, then being surprised by contractor tenders once drawings are complete.
Frequently asked questions
When should I rely on a budget estimate?
For go-ahead and funding decisions, not for contracting.
When does the estimate become accurate?
After construction drawings, quantity take-off and pricing.
Related terms
- Cost per square metreConstruction cost divided by built-up area, for comparison and early estimates.
- Cost planThe project budget split across its elements before design is complete.
- ContingencyA sum added to the budget to cover the unforeseen.
- Engineer’s estimateThe cost estimate prepared by the consultant or owner to compare contractor offers.
Read next
- Villa construction cost in Riyadh 2026: price per m2
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