Factors that Influence Buyer Decision for Property

Factors that Influence emptor Decision for PropertyCHAPTER 1 INTRODUCTION1.0 Introduction of subject araNowadays, the films for houses increase every year. In Malaysia, lodgement demands include all sorts of houses which are low cost houses, medium cost houses and in like manner senior high school cost houses. tout ensemble the demands for the houses come from all kind of income gatherings ground on their income. The supply of the houses sometimes over than demands that makes the houses abundant. more challenges of competitive market in these decades because the developers entering the house market increasing. At the same time, the local and internal economic makes the developers to aware and pay attention to the purchasers for their needs, satisfaction and preferences. When the developers meet the vendees needs, satisfaction and preferences in delivering the product, this result avoid in abundant of the retention.The thesis is about the findings of the search that run intos the factors that work out the buyers towards get the residential holding. The buyers that involved in this thesis are chosen from the people that attend new launched project and besides the buyer that already bought a house. The findings overly come from the observation of the field of lead area and too the market. wholly the factors that influence buyers in end- qualification pull up stakes be defined and the preferences and satisfaction of the buyers in like manner pickings into account. The outcome of this knowledge will help to increase the quality of the seat towards the development of new residential office in the market.1.1 Background of flying fieldThe study covers the buyers and alike the residential property in Kuching, Sarawak. The demand for houses increased in Kuching caused by the increment of the population in this town. The study after part similarly be the guide towards preparing the residential property ground on the preferences and th e satisfaction of the buyers. If the residential property build base on the preferences and satisfaction of the buyer, the market will be active and the supply of the houses will meet the requirements of the buyers through and through this study.The factors that maybe included that influence the buyers in finish making are design, reparation, developers reputation, facilities within neighborhood, resort and security and the equipment casualty. The factors that influence the buyer in decision making toward the residential property of each respective buyer is different, so through this study, the factors can be defined.1.3 Problem StatementThis dissertation is to know what are the factors that influence buyer in decision-making for residential property. It is to assure that the preferences and satisfaction of the buyers could be determined.1.4 ObjectivesThere are devil main objectives for this interrogation. They are as followsTo define the factors that influence buyers in deci sion making for residential propertyTo measure the level of importance of factors that influence buyers in decision-making forge.1.5 Scope of StudyThe scope of this study is mainly in Kuching which is located in Sarawak. The study will focus on residential property in Kuching Sarawak. The residential properties which are the landed property that involve in this study include the medium cost living accommodations and high cost lodging. The landed property that being focused are single news report terrace house, double storey terrace house, single storey semi-detached house, double storey semi-detached house, single storey detached house and double storey detached house.It also concentrated on the buyers in three assorts of age between 25 age grey-haired to 30 years old, 30 years old to 35 years old and 35 years and above. The three groups are chosen because of the age of 25 years to 30 years is the best age to own the house and the age of 35years and above is the age which they must own the house for living.Besides that, this study also focuses on the group of income in order to determine the level of affordability in buying the property. In this study, the residential property that involves is medium cost housing and high cost housing. So, the income group should be determined.1.6 Significance of StudyThe significance of this study is to know the factors that influence the buyers in decision making of residential property in order to make sure that the supply of the property will fulfill the requirement of the buyers in buying the property. It also important to know the preferences of the buyers so that no housing units in the area would be abundant caused by not fulfill their satisfaction.In addition, this study also can be the guidelines and also preparation for the developers in order to build and supply the property to the market and at the same time, the government can take action to avoid the housing development from being abundant. The factors tha t influence buyers in decision making are also important because it can help to determine the design, the location, the worth and also the facilities that take in the development.1.7 Methodology of StudyIn this study, two methods used in order to find the information to lead through the completion of this thesis. The methods are split into two which is primary data and mhoary data.For primary data, the method is by distributing the questionnaires. In distributing the questionnaires, the person to answer the survey are the new buyers, the recent residents and also the visitors at the new launched project and housing exhibition.For secondary data, the method are by manual which come from reading the reference books, journals, papers and also the magazines , by statistics data which can be smelling at the segment of Statistics of Jabatan Perangkaan Malaysia and Economic Planning Unit and also the data collection from online through websites related to the effect and also the in quiry papers. Through reading, much information can be gathered together for a good and successful outcome in this study. All the materials to be read will be find at main library of Universiti Malaya, library Faculty of Built Environment, National Library, Pustaka Negeri Sarawak and also Perpustakaan Sultanah Zanariah Universiti Teknologi Malaysia.1.8 Organization of StudyCHAPTER 1 IntroductionIn chapter 1, the introduction includes the background of the study that will be discussed in this thesis. It also orders the problem statement that also can be the hypothesis of this study. The objectives of this study also include in this chapter. Besides that, the introduction also discussed the scope of the study, the significance of study and also the methodology of the study.CHAPTER 2 literary productions ReviewLiterature review harps of the strategy of the thesis in order to gain and gather the data of information that are needed in this study. All the data from the articles in the property magazines and books, the journals related to the housing demands and property buyers, the research papers about the related topics, books that include all the information about buying a property and also residential property, magazines that shows the factors influence the buyers in decision making of residential property.CHAPTER 3 Overview the Study AreaFor this chapter, the overview of the study area will consists of the socio-economy in Kuching which is the location of this study. The socio-economy depends on the population of people in Kuching, the household income, the group of age, the changes in physical environment and differentwises socioeconomic issues.CHAPTER 4 Research epitome and FindingsThe research analysis is the analysis of this study from all the information and data that gathered together in order to get the outcome. All the analysis and the findings from this study determines into graphs, charts, tables and also pictures to make this study clear.CHAPTE R 5 Research Outcomes and ConclusionIn this chapter, all the finding and research analysis will be summarized and the conclusion of this study will be presented. Either than that, the implication of this study are also discussed and the availability of the problem statement whether it can be used or not.CHAPTER 2 LITERATURE REVIEWCHAPTER 2LITERATURE REVIEW2.1 IntroductionIn decision making for residential property, there are several factors that influence the buyers. The factors are divided into categories. The categories are buyers experiment and preferences, demographic factors, economic factors and mete outing strategy.This thesis will focus on residential property which is the landed property. The landed property consists of property for high income group and middle income group which are terrace house, semi-detached house and detached house. The property categorized according to the supply and demand in the market and also the charges.The location for this housing study wil l focus in Kuching, Sarawak that gravel a large population due to Sarawak, the biggest state in Malaysia which lose the multiracial including Malay, Chinese, Indian and others. The reason to stick out this location as the case study is because of the big location with multiracial and can explore the demand and the preferences of the consumers in buying the residential property.2.2 Definition2.2.1 Decision- MakingDecision-making is an outcome of mental processes. Every decision making process produces a finalchoice wherebythe output can be an action or an opinion of choice which is a continuous process integrated in the interaction with the environment concerned with the logic of decision making and rationality with the invariant choice.Decision making made by the buyer, depends on individuals need, preferences, satisfaction and also their requirement in order to choose the perfect and undecomposed choice in buying the property. The decision making influence by various factors.In this study, the objective is to determine the factors that influence buyers in decision making of residential properties. The decision making of every people related to the factors and the way of the people think in order to fulfill the need and satisfaction through the requirement of the property.2.2.2 Consumer (Buyer)The product which is goods and services that consumes by a person and has the ability to choose between the different suppliers and products. In the other hand, consumer or buyer is a party that requires or agrees to own, acquire and have the benefit in usage for the services that in exchange for money or other consideration chthonian a contract or agreement of sale.The consumer or buyer in this study just focuses on high group income and middle group income. It is because to look towards the choices or need of this income group in their decision making for buying residential property. For lower income group, it just only lead to the affordability in their decision making, so they are not chosen as the respondent in condition of buyer for this study.2.2.3 Consumer BehaviorConsumer behavior examines not only consumers action, but also the reasons for those behaviors. On a macro level, marketers are interested in demographic shifts as well as societys values, beliefs and practices that affect how consumers interact with the marketplace. Thus, concepts are drawn from sociology and psychology send off prominently in the study of consumer behavior. (Karen M Gibler and Susan L Nelson, 2003, p.63-64)Consumer behavior is the study of how people behave when obtaining, using, and disposing of products and services or when, why, how, where and what people do or do not to buyproducts.It mixes ofpsychology, social,personal andcultural. It is attempting to understand the buyer decision-making process for both, individually and in groups. The characteristic of individual consumers such asdemographicsand behavioral variables which is in an attempt to unders tand peoples regards. It also assesses influences on theconsumerfrom groups such as family, friends, reference groups, and society in general.Customer behavior study is based on consumer buying behavior, with the node playing the three lucid roles of user, payer and buyer. The race market is being the influential of asset for customer behavior analysis as it become a keen interest in the rediscovery of the true meaning of marketing through the re-affirmation of the importance to the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. Social functions can be categorized into social choice and welfare functions.Consumer behavior also can be define as the process and activities which the people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services to fill up their needs and desires. For cultural, the people w ill act based on the cultural that usually be the influence in certain places and surrounding. For social, the people will think and act more to socially action that also can be positive and negative. In physiological aspect, it is more to thinking and the personal behavior leads to the decision making. People maybe influence by the way they thinking of.2.2.4 MarketingDefinition of marketing by Institute of Marketing is the management function which organizes and directs all those business activities involved in assessing and converting customer purchasing power into effective demand for a specific production or service to the final customer or user so as to achieve the profit target or other objective set by the company.Marketing is a combination of marketing concept of marketing concept, marketing function and the operational implementation of these functions in the context of the concept. The marketing concept can be most simply explained as a belief that the organization can fu nction in the best interests of its customer and its self where a balance is achieved between the need of both of these parties. (Trustrum, LeslieBernard,1989, p.48).Marketing plan is the marketing strategy by the developer to carry their property to the people so that people will attract to buy the property from them. The advantages of marketing strategy will diverse marketing activities that can be better co-ordinate and can avoid or reduce to a minimum crisis management such as unsold unit and etc. The basis of marketing strategy is 4Ps consist of Product, Price, Place and Promotion.2.2.5 DeveloperThe coordinators of the activities that converting ideas on the paper to the reality by building the realproperty that encompassing activities range from therenovationand re-leaseof existingbuildings to the purchase of rawlandand the sale of improved parcels to others.Developers usually take the greatestriskin the creation or renovation of real estate and receive the greatest rewards s uch as the money and also acknowledgement from the purchaser or respective buyer that satisfy with their product. Usually, developers purchase a tract of land then determine themarketing of the property. After that, they developing the building program and design, obtaining the necessary public approval and financing, building the structure, leasing, managing, and eventually selling the property.Developers work with many different counterparts along each step of this process including the architects, planners, engineers, surveyors, inspectors, contractors, property agents and etc. The developers build the house to supply to the market and sell to the buyer based on the demand in the market. The demand depends on the needs of the consumer, the market trend and also the economic trends.2.2.6 ResidentialResidential property is the property in the residential area that includes the single family housing, multi-family residential or mobile house. The residential property is under the zo ning of residential and may allow high tautness land use or low density land use.Residential development is real estate development for the purpose of residential. The developments are when the land divided into lots with the house constructed on each piece of subdivided land.2.2.6.1 Medium Cost HousingMedium cost housing is the property that sell in the median price that can be purchase by medium income group and high income group. The medium cost housing in this research is the single storey terrace house, double storey terrace house, single storey semi-detached house and double storey semi-detached house.2.2.6.2 postgraduate Cost HousingHigh cost housing is the property that the price is high and usually for the high income group of people. The high cost housing is selling with the high price that the price influences by the material, the design, the location and the size or area. The people that usually buy the high cost property is the people that need the high satisfaction and also all about luxury. The high cost housing could be the detached house and also high end property. In this research, the high cost housing is the single storey detached house and double storey detached house.2.3 FactorsFactors divided into four categories which are demographics factor, economics factor, buyers taste and preferences and marketing strategy. The factors distribute in the categories so that it is easy to determine what, how, when and etc. In addition, the factors that influence buyers in decision of residential property can be determining by distributed the factors as above.For demographics factor, it includes the age, social class and race or ethnicity. Age of the buyer also important that may influence them in decision making because it may show that what type of residential property they want that can give them satisfaction or needs for the requirement of the property. For social class in this study, it consists of high income group and middle income group beca use it is easy to know what they want to consider before buying the property not only based on their financial. The low income group is not included in this study because of the affordability of them to buy the type of property which is just the low cost housing. Race or ethnicity is one of the demographics factor because it also could influence the buyer whether to live in a same location with it own ethnic or race or just mixed with other races and ethnic.For economics factor, it consists of prices, availability of pay and affordability. Prices of the property depends on the type of property, location of the property, the supply and demand of property and also the market trends of current situation. The availability of finance may depend on either the government loan or private institutions loan such as bank and etc. The finance also depends on the availability of the bank in releasing the amount of loan and based on the income of buyer. Affordability is the main thing to discuss whereby every people have their own level of affordability.Marketing strategy is also one of the factors in decision making. Marketing strategy has four basis which are price, progression, place and product. The price can me the measurement to know what is the price that agreed and affordable for the buyer based on the type of property, location and also the market price. The promotions in this marketing strategy consist of the launching of the project and the exhibition also important which is good in order to promote the property to the prospective buyer. Such promotion can attract more buyers and give the buyer opportunities to ask about the property and also giving the good image of developer and the product itself. Place is the location where is the property located and it seems very important because in every location, it have its own density and population. Some of the buyer wants the location either the high density or low density of population and some of the buyer wants to buy the property located in the city centre or otherwise. For the product, it depends on whether it is high class property or medium class property for high income group and middle income group. Depending on the class of property, the marketing strategy should be based on the focus group that will buy the property. So, the developer has the main role in the development to plan a good marketing strategy in order to have the successful project by selling 100% of the units.Buyers taste and preferences is the buyer needs and satisfaction in order to fulfill their taste and comfortless. The buyer needs and satisfaction is different. According to Abraham Maslow (1954), safety is one of the needs of human. The safety includes the security of family, health and property. So, the people needs the property for secure and health whereby every human being need shelter to lives. For satisfaction, it is more towards the luxury, taste and comfort that will be different depending on the person. Preferencesis a concept that have been used in thesocial sciences, particularly economics that assumes a real or imagined choice between alternatives and the possibility of rank ordering of these alternatives, based onhappiness, satisfaction,gratification, enjoyment and theutilitythey provide. More generally, it can be seen as a source ofmotivation. In cognitive sciences, individual preferences enable choice of objectives or goals.2.4 Factors Might Be Influence the BuyerFrom the factors above, the factors might be influence the buyer in decision making for the residential property are the design, location, developers reputation, facilities within neighborhood, safety and security and the price.The residential property has several of design nowadays such as contemporary design, modern design or traditional design. All the design chooses by the buyers to buy the residential property. So, the design might be one of the factors that influence buyer in decision-making. The location also might be the factors that influence the buyer in decision making. The location might be choose by the buyer are in the city centre, near the city centre and out of the city. The location that the buyer wants to live is the factors might be influence them in decision making.The developers reputation might be the factor that influences buyers because it is all about quality and confidence to the buyer to buy the house. The reputation of the developer could show the quality of the house and build the confidence to the buyer in buying the property from them. The safety and security in residential area is important because nowadays the criminal cases highly increased and made people more aware about the security for the safety living. The people aver that if in the area have a good security and safety, it would be safe for living and it might be one of the factor that influence buyer.The price is based on the design, location and also the market trends. The price that is reasonable bas ed on the area or size, design location would be the factors that influence buyer in decision-making. So, the factors might be influence the buyer will be determined in the questionnaire and the level of interest would be defined.2.5 Buyers Decision- Making procedureBuyers decision vary an importance and complexity, thus, it is important to classify them to be understand the characteristics, the products, the marketing strategy implications on each type of purchase behavior.2.7 Theory of inevitablyMaslows theory of needsFigure 2.5 Maslows Theory of NeedsThe safety level includes the security of the body, employment, resources, morality, the family, health and property. In this research, the important part of the safety is the shelter whereby its a need for the family to live with comfortable and healthy living in a property.So the buyers have the right in the need for a property that they want to buy and before make the decision, they need to know what is the factors that influenc e them in buying the property.2.8 ConclusionFor this literature review, the discussion more on the definition of decision making, consumer, developer, the marketing and also factors that lead to the factors that influence buyers in decision-making.All the category of factors based on the buyer itself and also the market trends that supply the property. The developer also have to take note that not only the demand of buyer need to be fulfill but also the economic and demographic factors must taking into account. In conclusion, the factors that influence buyers in decision making of residential property for this case of study and also the level of interest of those factors can be determine by the research.CHAPTER 3 OVERVIEW OF THE STUDY AREACHAPTER 3OVERVIEW OF THE STUDY AREA3.0 IntroductionThis chapter attempts to give an overview of the study in Kuching. The issues to be discussed in this chapter are information related to socioeconomic in Kuching.3.1 Background of Study AreaSarawak is one of the state on the island of Borneo which also known as Land of the Hornbills. It is situated on the north-west of the island and it is the largest state among all in Malaysia. It is the capital of Sarawak as it is the largest city on the island of Borneo and also the fourth largest city in Malaysia. Sarawak divided into eleven administrative divisions which are Kuching Division, Samarahan Division, Sri Aman Division, Betong Division, Sarikei Division, Sibu Division, Mukah Division, Kapit Division, Bintulu Division, Miri Division and Limbang Division.Each division divided into districts which are 33 districts in Sarawak. In Kuching Division, there are District Of Kuching, Lundu and Bau. The study area of this research is District of Kuching in Kuching Division. The district covers an area of 1, 863 square kilometres with the population approximately 620 700. The district of Kuching is administered and divided into three local governments which are Kuching wedlock urban ce nter third house, Kuching southwestern City Council and Padawan Municipal Council.The part under Kuching North City Hall covering an area of 369.48 square kilometers which is the area north of te Sarawak River, parts of overaged Kuching and also the western Central Business District. Meanwhile, the area south of the Sarawak River, eastern Central Business District and towards the southerly China Sea is within Kuching South City Council jurisdiction. The rural areas within Kuching District, Batu Kawa, Kota Sentosa and Third Miles are under the jurisdiction of Padawan Municipal Council.DistrictJurisdictionLand Area (square kilometers)KuchingKuching North City Hall369.48Kuching South City Council61.53Padawan Municipal Council1431.83Total1862.84Table 3.1 Total Area of Kuching DistrictFor further information about the location of Kuching, please refer to the adjunct I.3.2 PopulationSarawak has the population of about 579, 900 in years 2006.From this survey, it shows that Kuching Dis trict has a great housing market which the potential buyers are from the category of 25 years old and above.According to the population census 2006 published by surgical incision of Statistic, Malaysia, the population of Kuching District is as the following-JurisdictionTotalKuching North City Hall133, 600Kuching South City Council143, 500Padawan Municipal Council302, 800Total579,900Table 3.2 Population Census 2006 in Kuching District(Sources Population Distribution by local anaesthetic Authority Areas and Mukims, Census 2006, Department of Statistics Malaysia.)3.2.1 Projected Population by Ethnic Group(Sources Population Distribution by Local Authority Areas and Mukims, Census 2006, Department of Statistics Malaysia)The majority projected population by ethnic in Kuching District within Kuching Division is Chinese, which is 38% of the whole population and about 220, cd people. The second ethnic is Malays, 36% and follow by other ethnic groups 16% and Iban 10 %.The projected populat ion by ethnic group and jurisdiction in Kuching for year 2009 is shown in the Table 3.3. The total population from the table has shown that majority of residents in Kuching District live under Padawan Municipal Council jurisdiction. Population under Kuching North City Hall is lesser than other jurisdiction although the land area is bigeer in size than Kuching South City Council.JurisdictionTotalMalayChineseIbanOther Ethnic groupKuching North City Hall133, 60080, 16026, 72010, 04016, 680Kuching South City Council143, 50040, 80568, 80021, 06012, 835Padawan Municipal Council302, 80087, 799124, 84226, 89063, 269Note 1. Population projection based on the 2006 Population Census2. The added total may differ due to rounding(Sources Population Distribution by Local Authority Areas and Mukims, Census 2006, Department of Statistics Malaysia)3.2.2 Projected Population by Age GroupAge GroupKuching North City HallTotal579, 9000-480,5005-960,80010-1452,20015-1954, 90020-2449, 30025-2949, 30030-344 3, 50035-3937, 40040-4430, 70045-4929, 60050-5425, 30055-5920, 80060-6416, 90065-6914, 500