Interrelationships among key profit factors of Vietnamese residential projects using structural equation modeling

Abstract

This study aims to examine profit factors and their interrelationships to help real estate companies make effective project development decisions. The analysis results from questionnaire responses in 75 real estate companies, located in Ho Chi Minh City, Viet Nam, confirm five key profit factors with 16 associated variables. Interrelationships among the key profit factors were also investigated through a structural equation modeling. The variables, including population, income, transaction rate, construction cost, and construction loan’s interest rate variables, were found crucial in developing a profit enhancement plan. Strong relationships among five key profit factors were also discovered. The housing finance factor, for example, has a strong positive relationship with the housing supply factor, but a negative relationship with the buyer capacity factor. The study results help real estate companies to better understand the profit factors, and make a better profit improvement plan