Economic Analysis of Customized Apartments
Jeff TANG
The application of customization in housing industry has attracted attention from homebuilders and consumers in many countries for the last decade. With customized housing, customers have wider latitude of choices beyond the monolithic decision in traditonal housing. Given the additonal choices for customers, developers are facing new challenges in deciding different business alternatives such as what is the right mix of attributes offerered to customers, range of choices, etc. Specifically in this paper, high-rise Customized Apartment (CA) is selected as the research object to neutralize location factor. A framework in which CA develpers can address related economic questions is presented. To do so, firstly presented are CA market segment and the challenges that CA poses for architecture design, sales and marketing, project management etc. This analysis provides a basis to further identify cost drivers in this customization scenario. However, customization brings value along with costs, thus CA value creation model is discussed subsequently. Furthermore, an empirical evaluation of CA, which is a project carried out in China, is also present to discuss the operating window of customized apartment in a specific business environment.