Features of Cost Management of Residential Construction Investment Projects Taking Into Account the Life Cycle
Year: 2025
Type: article
Abstract: Under conditions of limited investment resources, the ability to accurately assess and effectively manage costs at all stages of residential construction is of crucial importance. The article is devoted to substantiating the specifics of cost management for residential construction investment projects, taking into account the project life cycle. It identifies cost management of residential investment projects as a multifaceted process requiring consideration of the full project life cycle specifics. It is established that the project life cycle comprises four main phases: conceptual, planning, investment, and operational. Various methods are applied to estimate costs at different stages: analogous and parametric methods in the early stages; resource-based and detailed cost calculations during the design stage; and bottom-up and PERT methods for high accuracy at later stages. Essential management tools include planned-versus-actual cost analysis, contingency reserves, change management, and contractual mechanisms (e.g., GMP contracts). The article also identifies several directions for improving residential project cost management approaches. First, integrating cost management into overall project management from the outset, involving cost estimators and economists at the conceptual stage, thereby embedding financial discipline into decision-making. Second, broader application of life cycle costing, considering not only construction costs but also operational expenditures, to encourage decisions beneficial over the long term, such as investments in energy efficiency that reduce post-commissioning expenses. Third, digitalization through implementing information modeling (BIM), project management systems, and analytical tools to enhance forecasting accuracy and responsiveness. Finally, improving the regulatory framework by developing standards and methods for cost estimation, updating cost standards to reflect current market conditions, and encouraging innovations will facilitate more transparent and efficient pricing in construction.
Source: Economic scope
Author: Roman Medvid
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4410309042