A Conjoint Analysis of Buyers' Preferences for Residential Property

Abdul Hamid Mar Iman (), Fu Yek Pieng () and Christopher Gan ()
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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

International Real Estate Review, 2012, vol. 15, issue 1, 73-105

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.

Keywords: Conjoint method; Residential, Consumer behaviour; Preference; Utility (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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