Small And Medium Sized Real Estate Enterprises Project Cost Management

In China,the real estate industry develops dramatically during these ten years from 2003 to 2013.The number of domestic real estate development enterprises reached more than 60,000.But the listed real estate corporations which have the industry influence and the market competitiveness in the real estate industry are only three thousand,the rest of organizations are mostly small and medium real estate companies.Moreover,with the national macro-control policies continue to intervene in the real estate market and the management of small and medium real estate enterprises are most ineffectively accompanied with slack project cost management and deficient risk awareness,which results in uneven development levels of small and medium real estate businesses.The profit of the real estate business is derived from the difference between the sales revenue and the cost.Whether the sales revenue can be increased or not,reducing the cost of the enterprise is always a vital approach to obtain the economic benefit.Therefore,if the small and medium real estate enterprises intend to win a place in the fierce market competition,they have to find an effective method to diminish the cost,so as to further strengthen their own competitiveness.This essay adopts the life cycle costing approach to analyse the characteristics of enterprises and the internal and external environmental factors which can influence the cost of enterprises,investigate the main problems and vulnerabilities of project cost management and put forward the corresponding solutions.During this problem solving process,a project designed by a medium real estate corporation in Hohhot called Qingcheng Longbinyuan will be analysed as an example in this essay.The cost management of Qingcheng Longbinyuan is divided into four stages:project decision,design planning,construction and completion and sale.The problems of project cost management are different during the different periods.For example,the company did not focus on the market investigation and feasible evaluation during the project decision stage,the detailed issues were not rigorous in design planning stage.In addition,the shortage of responsibility of cost and standards of performance in construction period and unicity of marketing are also required to be considered.Finally,it will provide the suggestions to solve the challenges of project cost management during different periods,including paying attention to market research and feasibility of the project,details of the project planning and establishment of cost management responsibility etc.Through the analysis of Qingcheng Longbinyuan case,it can provide a referential experience for small and medium real estate projects to optimize the cost management.