CUB — Basic Construction Cost Index

CUB (Custo Unitário Básico, or Basic Construction Cost) is an index that tracks the change in direct residential construction costs, calculated monthly by each state’s Construction Industry Union (Sinduscon) using the methodology set out in ABNT standard NBR 12721. In Santa Catarina, the reference index is CUB/SC, published by Sinduscon-SC.

• Legal basis: Law 4,591/1964, Article 54, requires the CUB to be calculated and published by each state’s Sinduscon, and allows it to be used as an adjustment index in real estate development contracts.
• Composition: the CUB reflects the cost of construction materials, labor (including payroll charges), and site administrative expenses. It does not include the land, design fees, permits, developer profit, or ITBI.
• Use in contracts: it’s the most common index for adjusting installments during construction (typically the INCC applies during the building phase, followed by the CUB once contracted). The index protects the developer against rising costs and can raise the final price the buyer pays.
• CUB vs. INCC: the INCC (National Construction Cost Index, calculated by the FGV think tank) is similar and also widely used. Contracts using INCC and CUB tend to track closely, but can diverge during periods when specific regional materials spike in price.
• Project types: the CUB is calculated for different project standards (low-, standard-, and high-end residential, and commercial), each with distinct values. High-end projects carry a higher reference CUB.

In Florianópolis, high-end developments with 36- to 48-month delivery timelines expose the buyer to meaningful cumulative CUB variation. During the materials-inflation cycle between 2020 and 2022, CUB/SC swung 15% to 20% per year, driving up the value of the intermediate balloon payments and the adjusted outstanding balance.