Life-Cycle Cost Assessment in Real Estate Decision-Making Processes: Scope, Limits and Shortages of Current Practices—An Integrative Review

Life-cycle cost assessment has gained increasing relevance across sectors related to urban and building development. In real estate and public procurement decision-making, it offers a comprehensive view of property costs beyond the initial investment, which aligns with European Sustainable Development policies and new taxonomies in sustainable investment. Life-cycle cost assessment supports sustainable design decisions by integrating multiple perspectives and methodologies, including Whole Life Costing and Net Present Value calculations. This approach enables a comprehensive evaluation of long-term costs and benefits, assessing their impact on economic viability and profitability throughout the investment life cycle. However, several challenges persist in standardizing methodologies, developing comprehensive data inventories, and ensuring consistency in result interpretation. The absence of universally accepted frameworks and guidelines introduces additional limitations for practitioners, including estimation inaccuracies, biased assessments, unreliable probability judgments, and the neglect of indirect consequences in decision-making. This review particularly emphasizes the need for interdisciplinary research to advance the integration of costs and benefits of externalities and intangibles associated with social and environmental criteria.