A study of the cost planning strategies adopted by project managers in real estate projects
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Date
2021-06-29
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Abstract
The amount of investments and participation of stakeholders in Real Estate building
projects is high, hence cost planning process is more complex and has various stages.
Therefore, in Real Estate projects there are countless problems of cost overruns. The cost
of building a house, however, is directly related to final selling rates. Eventually, the
price level of real estate houses becomes very costly and the level of project execution is
affected by low patronage. Hence effective cost planning is key in Real Estate
construction projects. Therefore, the study aimed at exploring the cost planning strategies
used by project managers in the Real Estate Sector in Ghana. The study had three (3)
objectives which were to determine the cost planning strategies used by project managers
in real estate projects in Ghana, to ascertain the challenges faced by project managers in
cost planning in real estate projects in Ghana and to identify the significant strategies that
can be adopted by project managers to improve cost planning in real estate projects in
Ghana. The study adopted a quantitative research method and thus, a structured
questionnaire was developed and distributed to seventy-five (75) respondents and fiftysix (56) were retrieved for the analysis. The collected data was coded and entered into
the Statistical Package of Social Scientist (SPSS) version 20, by using mean score
ranking and standard deviation tools. With the first objective, it was realized that, the
most significant cost planning strategy was elemental cost planning. The second ranked
significant cost planning strategy was comparative cost planning. The third ranked cost
planning strategy was the cubic method. All the standard deviation values were below
one (1) which depicts a low variability between the responses given by the respondents.
With the second objective, it was realized that, the most significant challenges were
inexperienced project manager. This was followed by unscientific cost planning process
and high interest rates on funds from financial institutions. With the third objective, it
was realized that, the most significant strategy to improve cost planning was the decrease
the dependency on financial institutions for funds. The second ranked significant strategy
was adoption of suitable procurement system for specific contract. The third most
significant strategy was a clear definition of the scope of a project. From the findings, it
was recommended that, project managers must select adequately skilled cost planning
personnel to aid in the cost planning process and project managers must try to keep
accurate data on cost in other to enhance their cost planning.
Description
A thesis submitted to the Department of Construction Technology and Management,
Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of
the requirements for Degree of
Master of Science in Construction Management.
Keywords
Cost planning, Real Estate