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A Conjoint Analysis of Buyers¡¦ Preferences for Residential Property

  • Abdul Hamid Mar Iman

    ()

    (Associate Professor, Centre for Real Estate Studies, Universiti Teknologi Malaysia, PO Box 81310, Johor Bahru, Malaysia)

  • Fu Yek Pieng

    ()

    (Property Executive, Tebrau Teguh Berhad (8256-A), 81100 Johor Bahru, Malaysia)

  • Christopher Gan

    ()

    (Associate Professor, Faculty of Commerce, Department of Accounting, Finance and Economics, PO Box 84, Lincoln University, Christchurch, New Zealand)

Registered author(s):

    This study evaluates the preferences of middle-high income earners for newly designed high-cost residential property attributes in their purchase decision, by using the conjoint method, whereby the buyers¡¦ ¡¥trade-offs¡¦ of different product attributes are measured. The fractional factorial design is used to create eighteen sets of product profiles based on a combination of the six most important attributes that determine the purchase decision of buyers. The preference rating of the respondents is then decomposed to yield part-worth utility for each attribute level. A regression analysis shows that the most pertinent attributes of high-cost residential properties trade-off by the respondents, are type of property, design and features, price, built-up area, location, and reputation of the developer. Together, these attribute explain about 74% of the buyers¡¦ expressed utility of the product purchased. By using a hold-out sample of respondents, a conjoint analysis has predicted the buyers¡¦ expressed utility with a reasonable level of accuracy.

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    Article provided by Asian Real Estate Society in its journal International Real Estate Review.

    Volume (Year): 15 (2012)
    Issue (Month): 1 ()
    Pages: 73-105

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    Handle: RePEc:ire:issued:v:15:n:01:2012:p:73-105
    Contact details of provider: Postal: Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
    Web page: http://www.asres.org/

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