Building development cost drivers

Building development cost is influenced by a raft of complex factors which range from project characteristics to the operating environment and external dynamics. It is not yet clearly understood how these factors interact with each other and individually to influence building cost. This gap in knowledge has resulted in inaccuracies in estimates, improper cost management and control, and poor project cost performance. This study aims to bridge the knowledge gap by developing and validating a multilevel model of the key drivers of building development cost (BDC) and their causal relationships. Based on literature insights and feedback from a survey of industry practitioners, some hypotheses were put forward in regards to the causal relationships between the BDC and the following key drivers as latent constructs: project component costs factor, project characteristics factor, project stakeholders' influences factor, property market and construction industry factor, statutory and regulatory factor, national and global dynamics, and socio-economic factor. Observed indicators of the model's latent constructs were identified and measured using a mixed methods research design.