A System Dynamics Approach to Evaluating Factors Influencing Whole Life Cost Estimation for Residential Buildings in New Zealand

Abstract

<jats:sec> <jats:title>Purpose</jats:title> <jats:p>This study aims to apply a system dynamics approach to examine and model the interrelated factors affecting whole lifecost estimation for residential buildings within the New Zealand construction context. Accurately estimating the whole life cost (WLC) of residential buildings is critical to achieving long-term economic and environmental sustainability. However, existing WLC frameworks often overlook the dynamic interdependencies among influencing factors, particularly within New Zealand’s unique construction context, characterised by seismic activity, climate variability and supply chain constraints.</jats:p> </jats:sec> <jats:sec> <jats:title>Design/methodology/approach</jats:title> <jats:p>This study applies a system dynamics approach to model and analyse these complex relationships, integrating insights from a systematic literature review and 22 semi-structured interviews with industry professionals. The analytic hierarchy process was used to prioritise and weight 80 identified factors based on their relative influence, with consistency of expert judgements confirmed through the consistency ratio. These normalised weights were then combined with directional relationship mapping to construct a linkage matrix that informed the development of causal loop diagrams and stock-and-flow models.</jats:p> </jats:sec> <jats:sec> <jats:title>Findings</jats:title> <jats:p>The research highlights key feedback loops and time delays that affect lifecycle cost elements, including construction, operation and maintenance. Findings reveal significant gaps in current international frameworks such as ICMS, particularly their inability to accommodate regional risks and behavioural influences.</jats:p> </jats:sec> <jats:sec> <jats:title>Research limitations/implications</jats:title> <jats:p>The study proposes a context-specific enhancement to WLC methodologies, enabling more accurate and resilient cost estimation. This tailored framework supports informed decision-making by stakeholders and advances sustainable residential construction practices in New Zealand. However, the qualitative nature of the research limits the generalisability of findings beyond New Zealand’s residential construction sector.</jats:p> </jats:sec> <jats:sec> <jats:title>Originality/value</jats:title> <jats:p>This research presents a novel, comprehensive modelling approach that incorporates regional and behavioural factors specific to New Zealand’s residential construction sector, offering enhanced accuracy and practical value beyond existing international standards.</jats:p> </jats:sec>