Factors Influencing Cost Overruns in Residential Property Development in Port Harcourt Metropolis

Cost overruns remain a major challenge affecting the financial viability and successful delivery of residential property development projects. This study examined the factors influencing cost overruns and the strategies for managing them in the Port Harcourt metropolis, Rivers State, Nigeria. A cross-sectional mixed-methods design was adopted, combining a questionnaire survey with semi-structured key informant interviews. Quantitative data were obtained from 86 professionals and stakeholders selected through stratified simple random sampling, while five experienced built-environment professionals were purposively interviewed. Questionnaire data were analysed using descriptive statistics and the Relative Importance Index, while qualitative data were analysed thematically. The findings revealed that fluctuation in construction material prices was the most influential factor contributing to cost overruns (RII = 1.000), followed by inflation and macroeconomic instability (RII = 0.993), delayed payment for completed work (RII = 0.988), and inaccurate quantity estimation (RII = 0.963). Other important factors included frequent scope changes, poor site and contract management, material shortages, procurement delays, design errors and inadequate site supervision. Realistic and accurate cost estimation was identified as the most effective management strategy (M = 4.721), followed by the use of advanced technology (M = 4.349), risk assessment and contingency planning (M = 4.186), and detailed budgeting (M = 4.081). The study concludes that cost overruns result from the interaction of economic instability, financial constraints, estimation deficiencies, and weak project management. It recommends realistic cost estimation, timely project financing, effective material procurement, technological cost monitoring, competent contractor selection, and strict adherence to the approved project scope.

Keywords: cost overrun, residential property development, construction materials, cost estimation, project management.