The pandemic is likely to disrupt land cost, build cost, development value and margin. What does that mean for supply?
There is a lot of talk about the loss of viability on residential development at the moment. Viability is generally made up of four key components, land cost, build cost, development value and margin. It is the margin that usually dictates viability, and this is directly related to the risk associated with the development including market conditions and the physical characteristics of a scheme.
Land cost and build cost relate to the supply side of the equation.
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