PROPERTY DEVELOPMENT CYCLES Prepared By: Assc. Prof. Sr. Dr. Azlina Md. Yassin PROPERTY DEVELOPMENT (BPE 34603)
CRITICAL FACTORS AFFECTING REAL ESTATE INDUSTRY 1. Economic growth (GDP). 2. Government Policies, interest rates and schemes. 3. Population growth & urbanization. 4. Household income growth. 5. Infrastructures & catalyst development.
Determinant factor for Property Pricing 1. Market 2. Country’s Economy 3. Actual Cost level 4. Marketing Cycle
Determinant factor for Property Pricing Market Demand Supply
Country’s Economy Economic Growth Purchasing Power Level of Income Determinant factor for Property Pricing
Stock Purchase Price Wholeseller’s Price Market Price Marketing Cycle Retailer’s Price Determinant factor for Property Pricing
PRICE FOR PROPERTY Price What does it refer to ?? Other Factors % profit from cost Reflects/reflected by Market Value Based upon Offer Price/ Market testing
Costs • Determined by: (1) Land costs (2) Construction costs (3) Infrastructures & Utilities (roads, electricity, water, telephone, lifts, escalators etc.) (4) Professional (fees) Costs (5) Preliminary Costs (site & legal) (6) Preliminary Costs (site preparation) (7) Contingencies (8) Project Management Fees Etc. (9) Advert & Promotion (10) Marketing/ Agent
(4) Professional (fees) Costs (based on needs of Prop. Dev. • Architect • C&S/ M&E Engineer • Land Surveyor • Quantity surveyor • Lawyer • Marketing Agent • Town Planner • Valuer • Interior designer etc.
(5) Preliminary Costs (site & legal) Premium Subdivision Preliminary Survey costs Planning costs Development & Building Plan Fees Etc.
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- Supply And Demand