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A Conjoint Analysis of Buyers' Preferences for Residential Property

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Abdul Hamid Mar Iman & Fu Yek Pieng & Christopher Gan, 2012. "A Conjoint Analysis of Buyers' Preferences for Residential Property," International Real Estate Review, Global Social Science Institute, vol. 15(1), pages 73-105.
    • Handle: RePEc:ire:issued:v:15:n:01:2012:p:73-105
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    References listed on IDEAS

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    More about this item

    Keywords

    Conjoint method; Residential; Consumer behaviour; Preference; Utility;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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