Value Creation Based Cost Management of Real Estate Project

In the increasingly competitive real estate market, the cost management of real estate enterprises has become more and more important. However, in the cost management and cost control, the goal should not be to minimize the cost of every activity during the real estate development, but to consider the contribution of every cost to the project´s value, and as a result, to maximize the efficiency of the real estate project. This paper is based on a value-creation view, from which cost management is considered to be systematic, dynamic and diverse. Using AHP (analytical hierarchy process) method, we find that five activities, which are location selection, layout plan designing, developed planning and promotion, land using right acquisition, market research and initiate planning, contribute more to the project value creation by cost-adding. In the cost management practice of real estate enterprises, investment during these activities should be increased to make the project more cost-effective.