Low-margin Commodity Residential Project Cost Management

In the current real estate market, land cost, construction cost, management cost andother cost are rising while there is a limited space to rise for housing price whether thehousing price can be reduced to the expected point of the public. Therefore, the era ofprofiteering in real estate has passed and a reasonable profit should be the firstconsideration for a real estate project. Apart from indemnificatory housing, affordablehousing and other government subsidised housing, there will be a lot of low-profitcommodity housing develop projects for a large-scale real estate developer. And lowcost must be involved as correspondence to the low-profit projects.In this paper, it is analyzed that the business cost management model of real estateenterprise is gradually developed based on project cost management mode, and thencurrent situation of project cost management in domestic and foreign is analyzed. Atlast, the business cost management model of real estate enterprise is studied on theabove basis. The business cost management model of several real estate enterprises indomestic is analyzed, and advantages and disadvantages are concluded with eachmodel’s suitable type of business. Further analysis of cost control point in each stage ofcommercial residential project development is done on the basis of summing up thebusiness cost management models of large real estate enterprises. Effective ways andmethods are provided to conduct cost management in each stage. For commercialresidential projects, the project cost will be controlled within the established range withgood cost management model in the current situation in order to achieve the expectedprofit.The last case section of this paper describes cost management model in the wholeprocess of a low-profit project in western suburbs of a third-tier city. Analyze anddiscuss the cost management model in project development process to find an efficientand rigorous cost management system in order to reduce cost reasonably, improve thecore competitiveness of enterprises and remain invincible in the fiercely competitivereal estate market and at the same product quality and service of commercial housingare ensured.