By: Andrii Gargun, Residential Development Expert

Abstract

The article explores the common challenges in the implementation of large-scale residential development projects. Based on practical experience and current statistical data, the author examines 10 key problems that may affect the timing, budget, and quality of construction. Each issue is accompanied by an explanation and recommendations for its prevention, providing valuable insights for developers, designers, and investors.

Statistics You Might Want to Consider

Large-scale housing construction continues to play a significant role in urbanization, particularly in growing urban areas. However, industry data suggests that despite substantial planning efforts, many such projects face operational and financial setbacks.

According to research:

• In around 9 out of 10 cases, large construction projects experience budget overruns.
• The average cost overrun is typically between 15% and 28%, with some cases reaching up to 80%.
• Around 32% of cost overruns are linked to initial miscalculations in estimates.
• 98% of megaprojects face either cost overruns or significant delays.
• The average project delay is around 20 months, which can be critical when considering contractual obligations.
• As much as 35% of builders’ and engineers’ time is spent on non-production activities.
  

These figures highlight that operational failures in large residential projects are relatively common. A comprehensive approach and careful management decisions can reduce risks and contribute to a more stable and profitable project outcome.

10 Common Mistakes in Residential Complex Implementation and Ways to Address Them

Experience shows that even with the right budget and team, mistakes in large residential projects are often recurring — and most of them are quite similar. Here are the key issues:

1. Underestimating the Context: Location and Surrounding Infrastructure

Mistake: Projects initiated without a thorough analysis of the local context might end up struggling. Factors such as transportation accessibility, utility network density, environmental conditions, and the demographics of the area are sometimes overlooked. For example, building high-end housing in an industrial zone or near a busy highway can often lead to lower demand.

Solution: It’s crucial to perform detailed assessments at the initial survey stage, which should include everything from geomarketing to transportation load analysis. Sociological studies can help to better understand the future residents’ needs, while a technical survey will give an accurate estimate of the costs involved in connecting utilities.

2. Lack of a Master Plan as a Strategy

Mistake: When a project is developed in a piecemeal manner without a clear master plan, the result is often disorganized development. This can lead to a mismatch between residential, public, and green spaces, which may create conflicts of interest and strain infrastructure.

Solution: A well-thought-out master plan should consider phased development, transportation routes, recreational areas, and the placement of social and cultural institutions. Integrating amenities like schools, shopping centers, and parks into one cohesive plan can increase both the project’s value and its attractiveness to potential investors and residents.

3. Ignoring Site Engineering Preparation

Mistake: Issues such as poor soil strength, uncharted underground utilities, and high groundwater levels can halt construction, causing months of delays and significant losses.

Solution: Carrying out engineering-geological, hydrogeological, and geodetic surveys before beginning the design stage is essential. A feasibility study should address potential technical challenges and suggest appropriate solutions.

4. Lack of a Change Management System

Mistake: Projects can quickly become unmanageable without clear procedures for handling changes. Each new decision can trigger a cascade of problems, resulting in delays and additional costs.

Solution: Implementing a digital change management system that integrates with BIM models and adheres to established procedures ensures real-time control over any deviations from the schedule or budget.

5. Superficial Budgeting and Financial Modeling

Mistake: Unrealistic financial forecasts often occur when unforeseen costs, operational expenses, and market risks are not fully accounted for.

Solution: Developing a multi-tiered budget that includes both CAPEX and OPEX, along with a contingency fund, is vital. For instance, an unforeseen 20% increase in construction material prices during an economic crisis can become a critical issue without proper financial reserves.

6. Ineffective Contractor Management

Mistake: One of the most common setbacks is poor coordination among subcontractors, which often leads to scheduling delays, equipment downtime, and conflicts on-site.

Solution: Using ERP systems in conjunction with BIM modeling can help synchronize construction phases and address potential conflicts before work begins. Critical path management allows teams to closely monitor key dependencies and address issues as they arise.

7. Ignoring End-User Needs

Mistake: Developers may design an aesthetically impressive complex, but if it doesn’t meet practical needs — like convenient layouts, adequate storage, or sufficient green spaces and parking — the property may fail to attract interest.

Solution: Using Customer Development practices in project management, such as surveys, focus groups, broker consultations, and prototype testing, ensures alignment with the actual demand of future residents.

8. Lack of Sustainable Solutions and ESG Approach

Mistake: In today’s climate-conscious world, projects that ignore sustainability issues often face higher operating costs and reduced investment appeal.

Solution: Adopting international sustainability standards (like LEED or BREEAM), implementing solar panels, rainwater harvesting, and green roofs can all improve energy efficiency and lower operating costs. Increasingly, investors require ESG (Environmental, Social, and Governance) reporting, and projects lacking it might risk missing out on financing.

9. Lack of Interdisciplinary Integration

Mistake: When different professionals, such as architects, engineers, marketers, and lawyers, work in isolation, it often results in misalignment between the concept, execution, and sales, leading to quality issues, legal risks, and positioning errors.

Solution: Establishing a unified project team and integrating all participants into a Common Data Environment (CDE) can ensure consistent vision and communication throughout all stages of the project.

10. Absence of a Post-Project Support Strategy

Mistake: After a project is completed, the lack of a clear operational management system can lead to ongoing issues with maintenance, landscaping, and engineering problems, which can undermine the project’s reputation.

Solution: Involving a property management company during the design stage and utilizing a digital twin can help manage the project effectively throughout its lifecycle.

Summary

With 85% of projects experiencing cost overruns — with some large projects seeing increases as high as 80% — avoiding these mistakes becomes essential for a smoother implementation. A systemic approach focused on quality, sustainability, and effective management practices can significantly reduce risks and create a solid foundation for long-term success. This approach not only builds investor confidence but also improves resident satisfaction and enhances the developer’s reputation as a reliable partner.

Sources:

Soulti, E., & Leonard, D. (2016). The Value of BREEAM [Briefing paper]. BREEAM. URL: https://tools.breeam.com/filelibrary/Briefing%20Papers/BREEAM-Briefing-Paper—-The-Value-of-BREEAM–November-2016—-123864.pdf

Yaqub, M. (2025). Construction Cost Overrun Statistics: A Must Know [Online article]. Contimod. Updated March 10, 2025. URL: https://www.contimod.com/construction-cost-overrun-statistics/?utm_source=chatgpt.com

Flyvbjerg, B., Holm, M. K. S., & Buhl, S. L. (2002). Underestimating Costs in Public Works Projects: Error or Lie? [Research paper]. Journal of the American Planning Association, 68(3), 279–295. URL: https://www.tandfonline.com/doi/abs/10.1080/01944360208976273