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Customer-perceived Value in Residential Developments: the Case of Hornsberg Strand, Sweden

Author

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  • Berndt Lundgren

    (Associate Professor in the Department of Building and Construction Management, Division of Building and Real Estate Economics, Royal Institute of Technology, Stockholm)

Abstract

This paper presents a new model by using a structural equation technique. This model integrates the productivity theory and customer-perceived value to identify key features that residential customers seek when making their decision to buy or rent a residential apartment. A theoretical structural equation model is confirmed by using a dataset based on 283 respondents, those who are potential tenants of an ongoing residential construction project in Sweden that consists of 402 rental apartments. The results show that expectations of being able to relax in the immediate neighborhood as well feeling safe in the neighborhood have a high impact on customer perceived value. Moreover, analysis of a two bedroom apartment, used as a show apartment, reveals that an apartment with plenty of natural daylight and a well proportional layout has the highest impact on customer perceived value. Professional developers and municipalities could use the proposed residential customer perceived value model (RCPV-model) to increase their understanding of customer-perceived values by verifying key drivers in successful residential projects and acting on them when planning new development projects.

Suggested Citation

  • Berndt Lundgren, 2013. "Customer-perceived Value in Residential Developments: the Case of Hornsberg Strand, Sweden," International Real Estate Review, Global Social Science Institute, vol. 16(1), pages 1-27.
    • Handle: RePEc:ire:issued:v:16:n:01:2013:p:1-27
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    References listed on IDEAS

    as
    1. Kurt Psilander, 2004. "Niching in residential development," Journal of Property Research, Taylor & Francis Journals, vol. 21(2), pages 161-185, November.
    2. K. K. Lancaster, 2010. "A New Approach to Consumer Theory," Levine's Working Paper Archive 1385, David K. Levine.
    3. Grunert, Klaus G. & Bech-Larsen, Tino, 2005. "Explaining choice option attractiveness by beliefs elicited by the laddering method," Journal of Economic Psychology, Elsevier, vol. 26(2), pages 223-241, April.
    4. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    5. Perry John Forsythe, 2007. "A conceptual framework for studying customer satisfaction in residential construction," Construction Management and Economics, Taylor & Francis Journals, vol. 25(2), pages 171-182.
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    Cited by:

    1. Setyo Ferry Wibowo & Gatot Nazir Ahmad & Solekhah, 2020. "Perceived Value of Green Residence: The Role of Perceived Newness and Perceived Relative Advantage," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 443-456.

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    More about this item

    Keywords

    Customer perceived value; Productivity analysis; Structural equation modeling; Residential construction project;
    All these keywords.

    JEL classification:

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

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