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How much does an architectural project cost in Albania?

Sa paguhet një projekt arkitektonik në Shqipëri?

How much does an architectural project cost in Albania?

Let’s touch a hot topic for our market …

How much does architectural services cost? Do we use the right methods to measure the value of our services and is this the right monetary compensation for our work?

This is one of the questions that is always asked and its answers take all kind of forms as determining the price of an architectural project becomes a bit complicated. After all, architecture is a creative process and not only technical, which makes it harder to determine the right value of the project. In addition, the lack of a base price list, for both clients and professionals, creates a cacophony and a constant struggle arises to evaluate the work of the architect.

The architectural project is a creative process  and if you add the time, commitment and dedication,  the equation of pricing becomes even more difficult! Fortunately or unfortunately our market is still unregulated, this means that there is no well-defined price list for the various services offered by an architect or architecture studio. Therefore, for the same project prices can vary from 5-10-50-80 euro / m2. To learn a little more about the market, we conducted a mini-questionnaire on this topic, to find out how architects value their work monetarily.

Today, in our market, there are several ways to determine the value of a project:

What payment method do you apply for your design service?

The first method:  the price is determined by the floor area, where a fixed price/m2  is multiplied with the surface.

From our questionnaire, the majority of architects – 89.7% – apply exactly this method to reach the final price of the project.

But how does this price vary?
According to our study, almost 60% of the architects in our market apply the price 15-25 euro /m2 for their interior projects together with contract administration (architect assistance during project implementation). This means that for an apartment of 100 m2, the architect will be paid from 1500 euros -2500 euros for the realization of the project and follow-up during its implementation.

But how long does such a project last?
Suppose you, together with the client, manage to agree and close the project for a month, (this at best, when you easily agree with the client) and the ordeal of selection the right products within the client’s budget begins. (Of course if you have managed to have the  budget limit information… we think it is essential.)

If you apply the price per m2: How much is paid for an interior project + implementation (apartment)?

Let’s suppose that you succesfully selected  the products (lighting, tiles, etc.) and the right furniture company  or showroom where you will purchase your products and furnitures. Minimally, according to the policies of companies, the minimum waiting period is from 4-6 weeks.

Supervising the site, endeavours to choose the right material and products, following the wall layout, electrical, mechanical work, etc. for sure will take time as at the construction site you will always encounter surprises.  Let’s assume that in total of  5-6 months you will finish your project. (Mainly for apartments, because for bars & restaurant, the time is always shorter, due to the rent.)

Let’s go back and divide the total amount of the price by the month spent on this project, to understand more on how much our work is worth.

In a medium payment of 2000 Euros, ( for a 100 m2 apt) divided by 5-6 month, the time you will need to finalize this project, at the end you will be payed 333 euro/month! Gross worth, as you need to pay VAT, taxses or utilitary expensees. At the end the value of one day of your work, is less than 12 euros, supposing that you work only during weekdays ( it sounds a bitter joke for architects.) Is it worth it? Should this evaluation change? Do we need a base starting price, a pricing reference system by creating above all market regulators that provide the architects with their legitimate position as a professionals?

For large scale projects, what price do you apply for your services?

Let’s go back to the survey:

When it comes to large projects, prices naturally vary and the solution of the details is not the same as in the interior, but again in this case most of architect 46.5%, answered that the best way to evaluate their work, is through the price per m2, which varies from 5-10 euros/m2, mainly applied mostly for projects such as residential buildings.

Another crucial point is the architect’s site visits. We asked if you get paid for visiting the construction site. Most architects, nearly 75% , do not charge for their visits, meanwhile the rest who apply a payment for their site visits, have brought in a variety of answers. In fact site visits are essential to the progress of work, visits which always last longer than predicted. We could not come up with an average, but some apply 1 euro/hour, 3 euro/house, 15 euro/hours and evem some apply a fee of 50 up to 70 euro/hours

( we are not sure if this is a price for those projects where implementation is included).

Do you charge for visiting the construction site?

The second method: payment in % of the total investment.

About 45% of the architects who completed the survey at this point, responded that they apply the percentage payment in the amount of 5-10% of the investment. Meanwhile, the value of  % is affected by the size of the project and is in inverse propotion in relation to the project’s size.

Let’s go back to real numbers!
If in our hypothetical apartment of 100 m2, the  investment done varies from 400-500 euro/m2 and the value of the investment has reached the figure of 50 000 euro, then based on the assessment of  % (10-15) of the total  investment, the architect have to be payed form  5,000  up to  7,500 euros (for the same apartment).
But how willing are investors, clients to pay such a figure and the most important question: Can we control the real value of the total investment?
Are we as architects, a little demanding on our service or is it the unregulated market which forces the architect to lower prices in search of work, of course sacrificing quality?

For payments based on the % of the investment, what is the value you usually charge for your service? (no follow-up)

The last method : payment over the working hours over a project.

This is a well-known practice in the world of freelancers. Via some apps like Timecamp (or similar)  you can measure the time you spend on the realization of a certain project. With a simple matematical action you can reach the final price, by multiplying the time spent with the value of one hour of your work.

But in Albania hourly payment are applied only  for site visits and it is not applied in design, at least in our market, because there are many freelance professionals who work online and their payment varies exactly from the hours dedicated to the project.

How can the market be regulated?

In fact, there is a Council Of Ministers Decision, no. 354, which sets the tariffs for prices applied in design which is mainly used for projects implemented with public funds, but which is also instructed for projects with private clients. However, the pricing of the architectural project goes through some complex calculations, as in the project value, which varies in relation to the value of the investment, there is room for interpretation because it includes other services such as testing, design task or services from other professionals, making it a bit difficult to determine the value of the architectural project. (We will surely return to this CMD so everyone understand better.)

This is the first step taken to establish a proper appraisal system, but the reference prices have not yet been approved, which makes the definition of the role of the architect and his appraisal confusing and unclear. The responsibility falls on all of us, to be more determined and to demand the evaluation of our work in the most correct way and at the same time being paid based on the real prices of our market, as it does in Kosovo.

If you also implement the project, what is the % you apply for your service?

What do architects suggest?

In conclusion, we asked the architects about the best way to determine their payment. Of course we have encountered a variety of answers and what we strongly want to emphasize is the fact that the architectural project can not be valued only by the square meters, since it is considered a creation, think about it as a painting or sculpture… do these artist value their creativity with m2?

There is a stagnant situation that weighs on those professionals who work legally, declaring all their heir jobs, employees, which adds to the costs and of course, meaning their starting price is higher than those freelancers who work from their home. This situation causes large market fluctuations and imbalance. Therefore, the important thing is the agreement between us to have an initial standard not only in price but also a minimum standard in design.

We believe that enough time in transition has passed, and a reference price list is a must, where the minimum payment of a project can be easily calculated and this should not only apply in relation to the state or public entities, but also be a basic reference for any project commissioned by any client. Necessary both for our profession and for the client.

However it is a multi-factor and complex process, but we need to be an active part in accurately determining the value of our work. This is achieved by working together to set at least floor prices and then let the free market to defines the most successful professionals.

The ball is in our court, it’s the moment to determine the value of our work!

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