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FIRST-TIME HOME BUYERS: FACTORS INFLUENCING DECISION MAKING
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In a housing market, first time house buyers are important as they indirectly act as indicator to help regulating the housing policies and further promoting home ownership. The preferences of this group are taken into consideration as the basis for forecasting housing demand. Therefore, this group is considered as important and it is essential to identify their preferences. Purchasing a home is considered as the biggest financial decision in one's life and would affect the household's budget as the process involves a long time commitment starting from the very first down payment to the monthly payment in the future. Based on the literature reviews, several factors have been recognized which may influence their decision-making. Among the factors are house price, location, family transition, neighborhood and others. In this paper, the emphasis is placed on identifying the most important factors that influenced their decision. 1. Introduction Buying a house is the largest spending in most household budgets. That consumer expenditure importance to the economics of the country as it also importance to serve the psychological and social need. People who buy homes not only for a shelter but they are also seeking to express their values and aspirations. Study on housing choice has developed by understanding the housing preferences based on home buyers demographic factors such as age, household composition, income and current housing situation (e.g., Rossi, 1980). Such factors are initially will influences the buyers decision to buy a house. By understanding the consumer preferences and influenced factors can summarized the ideas of actual demand in the market. During 1980s, Malaysian faced a rapid development in property market especially in housing industry. Housing plays a major role in developing the country as it is treated as important sector in property industry. The property market has benefited from the social trend of independent living that has resulted in fewer occupants per household in Malaysia in the last two decades (Hamid, 1998). To the extent, fewer occupants per household means that demand for houses increased due to population started independent living or smaller families. In addition, the living trend also change as the children no longer stayed with their family, moving out live in different house, young adult married with few kids to ensure that they can cater all the need of their children.
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... Purchasing a house is the biggest spending in most family financial plans. It's one of the customer consumptions which is significant to the national economy and to serves the psychology and social need (Abdullah, 2012). A person may have to consider many factors when deciding to purchase a house since it is the most expensive spending for a household. ...
... e diagram below shows the summary of internal and external factors that influence people's decisions when purchasing a house: Previous research has established income is an important factor in house buying decision making (Abidoye et al., 2021;Mohamed et al., 2020;Chin, 2016). The level of income will affect the buyer purchasing power. In housing, (Abdullah et. al., 2012). Studying the first-time house buyer determination in house buying decision, stage in life cycle is related to age, marital status and number of children or household. Filandri and Bertolini (2016), in their study found among the internal factors, employment type is the most influential factor, as permanent employment provides stable in ...
... Therefore, a household must consider and think carefully when making house buying decision. Abdullah et al., (2012), showed financial and economic condition are the most influencing factor for first time house buyer. More research on factors influencing house ownership had revealed, house price is also one of the main factors that contribute. ...
Housing is a basic human need as explained in the Maslow hierarchy needs. Having a house is a very important entity in ensuring a sense of security for each individual and family. Deciding on buying a house is a crucial decision since housing expenses involved a large amount of cost in individual monthly expenses. Furthermore, the homeownership rate in Malaysia as reported by the Department of Statistics Malaysia (DOSM) in 2019 didn’t increase significantly. Thus, the government and house developers need to identify the important factors that influence the house buying decision-making to increase the homeownership rate in Malaysia. This study investigates the factors influencing housing buying decisions and the difference in factors influencing different income groups in Sepang, Selangor. This study measures the internal factors and external factors influencing house-buying decisions. The internal factors measure the income, stage of life cycle, employment and education subfactors. The external factors measure the financial and economic condition, house price, location, neighbourhood, house type and design and also government housing incentives. A mixed method was applied in this study by interviewing real estate experts and also a survey of 184 respondents in the case study area. Using transcribe method and analysing of the survey data with descriptive and inferential analyses to study the influencing factors. The real estate expert and respondents agreed all the factors were influencing house buying decisions except for education. The importance of the factors is also different among the income groups. For internal factors, all income groups agree that income is the most influential factor followed by employment, stage of life cycle and education. The importance of external factors is different among the groups.
... A house is a basic requirement that provides a peaceful and comfortable environment for a family. (Abdullah et al., 2012) Little information is known about the earliest origins of the house, but it can be traced back to the simplest form of shelter. Of course, the purpose of buying a building property is not only this, it can also be used as an office area, warehouse, business, rental, investment, etc. ...
... A home purchase decision may refer to the purchase of a home that meets the buyer's wants and desires (Mariadas et al., 2019). The housing requirements of house buyers are particularly essential in the housing market because they are related to predicting housing demand, which helps the government stabilize housing policies and stimulate the purchase of houses indirectly (Abdullah et al., 2012). Fundamentally, understanding housing preferences is critical for homebuyers to make decisions, particularly those who are purchasing their first house (Khan et al., 2017). ...
... According to Fernandez (2017), the Country Manager of Property Guru Malaysia, location is still the most important factor to consider when owning a property, whereas other factors are changing as an indication of property consumers' current mindset as compared to the 2016 study. Abdullah et al. (2012) concurred, ranking it as perhaps the most key element in determining a property consumer's decision. People usually choose to buy a new apartment that is adjacent to their previous home since they are more acquainted with the location (Chang, 2008). ...
This study aims to investigate the important factors that influence the decision to buy property in Bangkok under the new normal, as the building property sector in Bangkok has developed in recent years. The main objective of this study is to explore the impact of location, financial, property developer, living space, family members' influence, infrastructure facilities, environment, security and dwelling features on the purchase decision of Bangkok building property in the context of new normal situation. The researcher used secondary data method of archival research methodologies to investigate the elements that influence purchase decisions in Bangkok. By merging the four frameworks of prior studies, this study constructs a new conceptual framework. The researchers took a non-probabilistic sampling approach in a convenient and snowballing manner, with a sample size of 390 respondents. The researchers used statistical procedures to analyze and collect data. After descriptive analysis and multiple linear regression analysis, the results indicate that the purchase decision of property in Bangkok was influenced by five independent variables, which are location, financial factor, living space, family members' influence and security.
International Research E-Journal on Business and Economics
Download full text from this link: http://www.assumptionjournal.au.edu/index.php/aumitjournal/article/view/6280/3440
... Scholars in the public and private spheres of developed and emerging countries have focused their attention on housing as a kind of refuge (Farsi, 2010). The Abdullah, Nor, Jumadi, and Arshad (2012) found a correlation between housing and a country's macro and micro health outcomes. ...
Abstract: Since every person and household is different and is impacted by different elements, housing preferences and choices vary continually. To emphasize the elements in the research area, the study delved into a variety of factors that influence housing decisions in the low and medium-density areas in Akure. The study used both analytical and descriptive methods. Reliable data and information were obtained by using a case study technique with a questionnaire survey. The study area's housing choices are significantly influenced by socioeconomic characteristics and the ease of commuting inside the city. These results suggest that because of the potential long-term effects, planners, public and private stakeholders should actively recognise and address local requirements for housing. Since the majority of respondents in low-density residential neighborhoods have higher incomes than those residing in the medium-density areas, they will likely choose a respectable home with superior finishing and transport accessibility as it commensurate their source of livelihood and status. The middle-class populations are particularly concerned with transport accessibility and closeness to their places of employment to minimize additional costs associated with commuting and transactions. The study shows that the quality of the housing features and its characteristics have a major impact on their choice of housing. Based on the findings, recommendations were made.
... Previous studies have shown that first-time home buyer motivations change with the changes in housing markets [1,9]. It is undeniable that the Malaysian housing market is experiencing changes that reduce affordability [10], a primary concern amongst first-time Malaysian home buyers [11], which should in turn affect their buying priorities. It is imperative that the housing industry understand these changes in buyer motivations [5] to better cater to first-time Malaysian home buyers. ...
This study looks at the experiences first-time Malaysian home buyers and how sustainability concerns fit into these experiences. Three first-time home buyers who have recently bought houses, either for their own use or for investment purposes, were interviewed on their past housing experience, their current house and its buying process, and their future housing aspirations. This study has uncovered three sustainability themes based on these interviews; 'low knowledge on sustainability', 'sustainability must improve living quality', and 'different sustainability concerns between investment and own property'. All these themes are useful in guiding developers in building sustainable housing that meets the needs of first-time home buyers.
... Their study suggests that investment-related reasons were the most crucial factor contributing to the decision to purchase a house, and the financing option was the preferable alternative for acquiring a property. Alternatively, Abdullah et al. (2012) applied a qualitative approach to understanding the factors influencing the decision of first-time homebuyers. Their study also revealed that the most influential factor affecting first-time homebuyers is the financial and economic component (i.e., house price, ability to obtain finance, and payment terms). ...
Vacation homes emerged as an alternative accommodation sector with strong growth potential in small island destinations. As tourists scrutinize vacation home features, bundling their best attribute sets materializes as a critical strategy for vacation home developers. This study examined tourist preferences for vacation homes in Aruba, employing a choice experiment analysis. The experiment centered on location, price, unit type, amenities, and services. Based on identified preferences, the study applied a market simulator to uncover which combination of attributes carries the most impact on a vacation home purchase. The results suggest that the best combination involves location and price, which reveals a polynomial function anchoring a direct negative relationship between location and price. As the location moves further away from the tourist core area (i.e. the beach), the price elasticity of potential vacation owners also increases. Location seems to be a product-differentiating characteristic, which influences consumer utility and shapes demand.
... This includes culture and sub-culture, social class and social groups, family, and inter-personal influences as well as others such as geographical, political, economic, religious and environmental factors (Gajjar, 2013). Other studies reveal that more than any other factor, price is the most significant (Abdullah, Nor, Jumadi & Arshad 2012). Similarly, Reed and Mills (2006) identified affordability as the most influential factor. ...
Abstract
Chotto Bighai Union of Patuakhali District is one of the most disaster prone areas in coastal Bangladesh. The study is conducted to assess major climatic hazards at Chotto Bighai. This study focuses on the assessment of community resilience to disasters. A number of hazards including cyclones, river bank erosion, tidal floods, thunderstorms, heavy rainfall, waterlogging and salinity intrusion were predominant in the study area. The study is designed mainly considering responses and perceptions of respondents. Both primary (Sixty Household Questionnaire Survey, Four Focus Group Discussions, Ten Key Informants Interviews) and secondary data was collected for the research, correlated and interpreted. Interaction between hazards, physical, environmental, social and economic vulnerability is discussed. It reveals that cyclones, river erosion, tidal floods and thunderstorms are major natural hazards in the locality and the risk of cyclone (2.91) is prioritized compared to others existing risks related to the hazards experienced in this area. The community has achieved maximum 39 resilience in heavy rainfall (0.56). Resilience status of this community for waterlogging is (0.76), tidal flood (0.88) and salinity intrusion (0.83) which means that the community has below-average exposure, below-average damage, and average or slightly above-average recovery. The community is susceptible to cyclones (0.97), river bank erosion (0.96) and thunderstorms (1.04). They have achieved minimum levels of resilience in thunderstorms because there is no risk reduction practices available. People have achieved minimum resilience to cyclones due to its high frequency and intensity. The community has managed to reduce risks through indigenous practices and by social bonding. However, to reduce vulnerability and enhance resilience to disasters, proper action should be taken and strengthened in the near future.
... Several studies have tried to understand what housing attributes impact people's purchase decisions the most (Abdullah et al., 2012;Schirmer, Van Eggermond and Axhausen, 2014;Rahadi et al., 2015;Chia et al., 2016). ...
It often argued that price, type, tenure, location and size are the most relevant housing attributes that people consider when making purchase decisions. While true, this paper utilizes qualitative data gathered through interviews to argue that these characteristics cannot fully explain people's housing choice. On the contrary, other housing attributes-even if frequently seen as irrelevant-are often those that drive people's final purchase decision. The reason for this is that, while every person's search process is different, searching in stages appears to be a common practice. Specifically, location, tenure, size and price are criteria mostly used at the beginning of the search process, when people are defining what and where to search. At the end of the search, on the contrary, all the dwellings of interest are similar with regards to these criteria, thus other attributes become more relevant at determining people's final choice.
The study aims to assess the severity and impact of various factors influencing the lifestyle on housing preferences of young adults. Through a comprehensive examination of financial considerations, location preferences, lifestyle choices, and socio-cultural factors, the researcher seeks to quantify the relative importance of each element in shaping the housing decisions of this demographic. By analyzing survey data, interviews, and demographic information. The study will also explore the dynamic nature of these influences, considering how life stages, technological advancements, and environmental concerns amplify or mitigate their effects. The findings from this research will offer valuable insights for policymakers, real estate developers, and urban planners to better cater to the diverse and evolving needs of young adults in the housing market. As the most accessible and accurate surrogate for a consumer's choice to buy, preference research is vital. Many scholars from different countries have looked into housing preferences, utilizing different approaches and different definitions of the term "preference" to guide their studies. Many young people struggle to get a home because of housing shortages and financial difficulties, putting them at a disadvantage when competing with older generations. Research has shown that young people throughout the globe place a premium on being able to move freely about their homes. Nevertheless, it is very difficult to generalize about young people's housing preferences since they differ greatly between contexts.
Buying a housing property is exciting because it marks the beginning of a whole new chapter. Before start looking for a house, it is very important to understand the intention of buying a housing property, whether it is as an investment or for self-occupation. This will affect the type of property to be purchased, whether it is a landed property or a high-rise building. Many potential homebuyers, especially first-time homebuyers, make buying mistakes for the wrong reasons, which makes the process of trying to sell their homes long and expensive. Deciding on the type of property is one thing, but then you must weigh all the pros and cons, as well as the average house price, which can vary greatly. Housing property is a commodity and involves multiple processes. Therefore, this article intends to study and develop the conceptual framework of the housing purchase decision-making process. This article first reviews the conceptual definition of housing purchase intentions and decisions. Next, this article reviews past research to understand the similarities of housing purchase intentions, preferences, and decision-making, and to develop a basic conceptual framework. This article also discusses consumer behaviour as homebuyers in the housing purchase decision-making process.
The choice of an accommodation is influenced by a multitude of product attributes whereby buyers make trade-off between these attributes in their buying decision. This study examines attribute preference for condominium properties among a group of seventy-six middle-income earners in Johor Bahru, Malaysia. Adopting the traditional full-profile conjoint method, the respondents were required to state their cardinal preferences for eighteen sets of profiles of three most important attributes of condominium properties. The regression analysis confirmed that pertinent attributes of condominium properties most preferred by the respondents were related to price, built-up area, and location. This study discovered that apart from the subjective approach to understanding buyers' behaviour, conjoint method helps property marketers assess the utility of typical house buyers with regards to certain combinations of product attributes in their purchase decision.
b>Purpose – The purpose of this paper is to provide a rare insight into the motivation behind first-time buyers when looking to purchase their first home. The factors driving demand preferences for detached housing are constantly changing and difficult to measure, and often deemed to be a complex bundle of attributes.
Design/methodology/approach – The research in this paper is based on interviews with purchasers at a series of locations across Melbourne, Australia, who were actively seeking to purchase a home for the first time. The data were analysed using factor analysis to identify the core decision criteria in a new house that were most sought after.
Findings – The findings in this paper confirmed that “financial” issues accounted for approximately 30 percent of the actual decision by first-time buyers to purchase housing, where decisions relating to the timing and choice of housing are dependent on “site-specific” factors.
Research limitations/implications – The research in this paper is aimed specifically at first time buyers only and the influencing factors behind their purchasing decisions.
Practical implications – The paper shows that, if consideration is given to the characteristics that first-time owners are looking for, providers of new housing would be better equipped to meet this demand and maximise construction efficiency.
Originality/value – In the paper the emphasis was placed on identifying and analysing the decision criteria behind first-time buyers, which provided an invaluable insight into their concept of a suitable residence. Rather than analysing sales transactions after they have been completed, this research considers aspects of new houses that first-time owners are actively searching for, prior to making their purchase.<br /
The housing industry is crucial to sustainable development in Malaysia. The efficiency and effectiveness of the housing delivery system require housing provision for all. The housing industry, which had grown rapidly in the 1980s, encountered property oversupply recently. The majority of these units remain unsold for reasons beyond the price factor, ranging from poor location to unattractive houses. The main objective of this paper is to tackle property oversupply in the country by examining a detailed knowledge of home owning determinants. Homeownership should be encouraged as positive externalities of homeownership can be found in many housing surveys. Homeownership is a complex issue that is the result of many determinants, including housing characteristics (house types and property types), employment and income trends, and socio-cultural and demographic descriptors. In addition to determinants, efforts are needed to reduce regulatory barriers in the housing delivery system, which can significantly increase the cost of building houses. The government should make home financing more available and affordable by providing subsidies to low-income families and by creating incentives to save for homeownership. Efforts are also needed to extend opportunities to enhance the affordability of homeownership by liberalizing rules and regulations of Employee Provident Fund (EPF) withdrawal.
Executive Summary. Most real estate study is based on neoclassical economics. Consumers are expected to make decisions that maximize utility and wealth, given price and income constraints. Tastes and preferences are typically inferred from observing outcomes of consumer actions. However, the study of real estate can, and in some ways already does, benefit from inclusion of consumer behavior concepts. Incorporation of these concepts into real estate education would help explain and predict the behavior of real estate decision-makers. This article presents a review of some consumer behavior concepts relevant to real estate and suggests how these can expand real estate study.
This new edition retains ints authoritative presentation of marketing theory while still maintaining an interesting and engaging writing style. Stewart Adam, Deakin University; Sara Denize, University of Western Sydney, Australia. <br /
Over the past few decades Australia, like a number of other countries, has experienced a significant polarisation of household incomes as a result of social, demographic and economic changes. At the same time there has been a significant decline in home purchase rates amongst younger households. The paper uses micro data from the 1986 and 1996 censuses to explore some of the spatial and socio-economic implications of this change in housing tenure. It raises the question whether these changes are both related and interrelated. It suggests that tenure might be yet another factor that contributes to a process of social and spatial polarisation.
With the diversification of personal senses of value as well as the abundance of lifestyles, people's preferences, demands, perceptions and evaluations of their residential environment are also becoming more and more diversified. Accordingly, it is necessary to clarify this diversity of urban residential preferences and the diversified demands, perceptions and evaluations of residential environments. In this paper, we first put forward the concept of residential lifestyles. Then, using questionnaire surveys of two Japanese cities, Saga and Kitakyushu, we analyzed the characteristics of residential preferential patterns, residential choice factors and residential satisfaction, as well as their interrelationships. The results of this research will assist in the understanding of the diversification of residential lifestyles. It may also provide more information for the effective and efficient planning and development of residential environments by assisting the better understanding of the various patterns of residential preference, choice and satisfaction.
Families and households make up a significant proportion of the real estate market. There is, however, little information in mainstream real estate literature on the impact of family behaviour on real estate decisions. This paper clarifies some of these issues by analysing and expanding on many of the findings from the marketing literature, in particular the topic of influence between different family members in the purchase of a new home. This paper presents some important issues to be considered when examining family decision-making. These include the roles played by different family members and their influence at different stages of the decision-making process. It also reports on the findings of a study involving a series of in-depth interviews with real estate agents to determine their perception of the family decision-making process in relation to a house purchase decision. This culminates in a conceptual framework on family decision making specifically for the purchase of residential real estate, before discussing the implications of these findings to the general real estate market, including service, promotion and valuation.