FACTORS AFFECTING DEVELOPERS' DECISION MAKING

Abstract

The main purpose of this dissertation is to find out what are the factors affecting developers decision making and relate these factors to the boom and recession period. It is important to know what are the factors affecting developers' decision making during each period to determine the type of strategy that developers will adopt. From the findings of this dissertation, we can determine that the main 11 factors affecting developers' decision making are location and accessibility, land size and configuration, zoning, tax abatement and incentives, availability of skilled labour, cost of labour and land, environmental liability, Political Climate and Economic Stability, Financial Considerations, Market Conditions and Others (timing, quality of life, cost of living and psychological factors). Amongst the 11 factors, location and accessibility is the most important factor affecting developers' decision making, be it during a boom or recession. It can also be seen that there is a change in factors affecting developers' decision making before and after the Asian Financial Crisis in 1997. The research is taken further to analyse the developers' strategy, concluding that during a boom, developers invest in land with longer leases in the prime residential areas. Most of the land is bought from the government, by way of tender. During a recession, developers invest in land with shorter leases in the prime residential areas. As the government suspended land sales, the private market was more active.