Development Economics (QSB 4223)

Development Economics (QSB 4223)

Lecturer:  Mr Ho June Khai 

                  Miss Dianne Kok Hui Wen

This subject will introduce students to the development, roles and contribution of construction industry to national economy. It is initiated with the introduction of the process in a property development and factors that influence the development process. The subject also covers various techniques of development appraisal and source of finance available. It is then concluded with the important of market research to the overall development process and its impact of research to the development.

Objectives:

1. To understand the basic principles of economics and its link to the real world of construction and to develop an understanding of the whole process of property development.

2. To enhance the understanding of the contribution of feasibility study in property development.

3. To understand the overall mechanism of the finance system in the construction industry

Learning Outcome:

Through the study of this subject,

1) I am able to calculate the developer’s budget (i.e. total development cost and gross development value) during the initial development process.

2) I am able to execute the Cost-benefit Analysis in the early stage of investment proposal and valuation system to help on decision making during the feasibility stage.

3) I am able to classify various source of finance available in the construction industry and to outline the requirement in a quality market research.

Test 

The mid term test contributes to 20% of the overall marks. This 2 hour test consisted mainly of subjective questions as well as practical problem questions (where recall, analysis,valuation and application of concepts learnt are necessary to answer the questions competently).

Assignment

This assignment was to be completed in a group of 6 students and will contribute 30% of the overall marks.  

Group assignment was 65% and students had to perform an analysis on the number of units for each type of house and shoplot which can be built for a proposed development. Financial appraisal of the project was done using the Residue Method of Valuation, Cash flow based on the "Sell-then-Build" concept was done performed.

Individual assignment was 35% and students had to prepare a NPV and comment on the viability of the project based with a 12% cost of capital and "Build then Sell" concept..

                                         NPV of the project