INTERNATIONAL JOURNAL OF RESEARCH IN BUSINESS AND SOCIAL SCIENCE 9(4)(2020) 271-276
Research in Business & Social Science
IJRBS VOL 9 NO 4 ISSN: 2147-4478
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Consumers’ choice factors for buying residential property in the
Philippines
Jose Mari M. Lee (a), Eduardo G. Ong(b)
(a,b) University of Santo Tomas Graduate School, Manila, Philippines
ARTICLE INFO ABSTRACT
Article history: The researcher studied and investigated the level of importance of consumers’ choice mainly price,
location, safety and security, facilities and amenities, and exclusivity in the Philippines. This research
Received 16 May 20 was limited to 400 potential residential property buyers from any of the top 10 real estate developers
Received in revised form 28 May 20 in the Philippines. This study focused on 5 consumers’ choice factors mainly price, location, safety and
Accepted 12 June 20 security, facilities and amenities, and exclusivity towards purchase intention of residential property in
the Philippines. Among the 5 consumers’ choice factors for buying residential property, the number
one consideration is the safety and security (Mean = 5.530), followed by price (Mean = 5.488), location
Keywords: (Mean = 5.424), facilities and amenities (Mean = 5.266), and exclusivity (Mean = 4.983). From this
study, four out of five consumers’ choice factors are rated very high important namely: price, location,
consumers’ choice, Philippines, real safety and security, and facilities and amenities. On the other hand, exclusivity is rated of high
estate, residential property importance in terms of buying a residential property.
JEL Classification: © 2020 by the authors. Licensee SSBFNET, Istanbul, Turkey. This article is an open access article
distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license
M30, R30 ([Link]
Introduction
Residential property is the most important part of the real estate sector and has been foreseen as main source in development of the
market (Mydhili & Dadhabai, 2019). Also, Philippines is in growing motion in undertaking the environmental initiatives (Lamudi,
2016).
Philippine real estate industry’s stable development in the previous periods is recognized to the rise in demand for residential and
commercial properties determined by numerous influences. According to Leechiu Property Consultants, the demand drivers include
increasing city population growth; residential property needs of BPO (business process outsourcing) workforces; and overseas
Filipino workers (OFWs) remittances (Ortiguero, 2018).
Central Bank of the Philippines Consumer Expectations Survey results showed that the share of families deliberated last 3 months of
2017 was the right time purchasing a house and lot (Gonzales, 2018). Likewise, condominium units provide people with a more
reasonable way to homeownership, converting the city tenure construction, from a city mainly characterized by tenants to a mix of
homeowners with changing levels of responsibility for maintaining collective areas (Rosen & Walks, 2013; Kern, 2007; Lees, 1994;
Cribbet, 1963).
The level of importance of the consumers’ choice in terms of price, location, safety and security, facilities and amenities, and
exclusivity in the Philippines have not yet been expounded. The researcher studied and investigated the level of importance of
consumers’ choice mainly price, location, safety and security, facilities and amenities, and exclusivity in the Philippines.
This study aims to (i) identify the demographic profile of the potential residential property buyers, and (ii) know the level of
importance of the consumers’ choice in terms of price, location, safety and security, facilities and amenities, and exclusivity.
* Corresponding author. ORCID ID: 0000-0001-8444-6277
© 2020 by the authors. Hosting by SSBFNET. Peer review under responsibility of Center for Strategic Studies in Business and Finance.
[Link]
Lee & Ong, International Journal of Research in Business & Social Science 9(4)(2020) 271-276
This research was limited to 400 potential residential property buyers from any of the top 10 real estate developers in the Philippines.
This study focused to 5 consumers’ choice factors mainly price, location, safety and security, facilities and amenities, and exclusivity
towards purchase intention of residential property in the Philippines.
Literature Review
Demographic Profile of the Residential Property Buyers
Lamudi reported that around 60% of the potential residential property buyers are females and 25 – 34 years old are approximately
50% of the sales leads as they become more financially secure or advance to a new life phase (Alegado, 2020). In the research of
Rossini (1998) and Lutfi (2010), the immense quantity of residential property buyers are couples with children and conclude that
buyers’ civil status standing specifically single or married will show impact on residential property purchase decision (Al-Nahdi &
Abu Bakar, 2015). An educated individual inclines to bring intelligent resolutions in relation to an uneducated individual because of
the capacity of acquiring, processing and examining facts (Khaniwale, 2015). A quality occupation would give financial capacity for
every family (Majid, Said, & Daud, 2012; Clark & Onaka, 1983; Rappaport, 2008), and would entice the potential buyer to look for
new residential property (Majid, Said, & Daud, 2012; Miron, 2004). Study showed that income level influenced Indian consumers
to be in favor of low-rise residential property developments (Gupta & Malhotra, 2016). The quantity of kids in the family will give
the desires and penchants of residential property in a decent place, convenience, learning and restoration amenities (Majid, Said, &
Daud, 2012; Hurtubia et al.,2010).
Consumers’ Choice Factors
Price
Research showed that price is the most significant feature for 1BHR (bedroom, hallway and kitchen) buyers (Sundrani, 2018). In the
study of Nasar and Manoj (2015), revealed that among the 10 factors, price is the most affecting feature for the consumer outlook to
buy residential property. Purchasing a residential property will not be probable for most individuals, without sufficient financing
preparation (Chia, Harun, Kassim, Martin, & Kepal, 2016).
Location
Colliers International Philippines believes Manila Bay Area and Makati CBD have the benefit in relations of location with augmented
demand from firms purchasing residential property units for their workers in these submarkets, increased by the existence of Chinese
residents. For the moment, other locations must showcase the total living experience in their project sites to continue as feasible
choices (Macaranas, 2018). The locations of houses are another relevant aspect, and buyers usually consider the area, the social
atmosphere for children, the nearby services and the distances to workplaces (García-Magarino & Lacuesta, 2017; Debrezion, Pels
& Rietveld, 2010; Hempel & Jain, 1978). Proximity from the house to the office and facilities is one of the utmost concerns when
deciding to purchase on a residential property (Ho, Goh, & Ting, 2019).
Safety and security
There are two key security types that are shared among all gated communities. The first is the existence of safety and security
apparatus such as CCTV cameras, alarms, surveillance systems and intercoms. The second type of security is round aids given by
security guards (Osman, Rabe, & Bachok, 2011). Likewise, the security in a high-rise construction is diverse and challenging, it can
open one’s eyes to numerous distinctive features of haven (Gregory, 2017). Furthermore, gated communities are secured and
comfortable and have adequate public spaces for recreation; therefore, people are keen to walk in the community when they are not
busy, which can also uphold communication among neighbors (Wang, Peng, & Chen, 2018).
Facilities and amenities
A standard gated neighborhood in Malaysia would have leisure facilities for the suitable usage of occupants (Tan, 2016; Tan, 2011).
These include swimming pools, jacuzzis, barbecue spaces, exclusive clubhouse, fitness centers, convenience stores, prayer rooms
and other amenities that assist the everyday necessities of the tenants (Tan, 2016). Other study identified the basic amenities include
water source, power backup, sewerage system, parking lot and readiness of domestic assistance in the residential property
(Manivannan & Somasundaram, 2014).
Exclusivity
Exclusivity of the residential property depends on the uniqueness and privacy being offered by the real estate developer.
Neighborhood is an area in which occupants live together for a mutual interest (Thaker & Sakaran, 2016; Choguill, 2008).
Purchase Intention
Usually intention is a signal of an individual’s willingness to perform a behavior, and it is measured to be the direct precursor of
behavior (Kamal & Pramanik, 2015; Shen, 2009). Other study discussed that intentions denote an individual’s motivation of person’s
mindful choice applying effort to perform a behavior (Karunarathne & Ariyawansa, 2015; Conner & Armitag, 1998).
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Lee & Ong, International Journal of Research in Business & Social Science 9(4)(2020) 271-276
Research Questions
What is the profile of the respondents in terms of Sex, Age, Civil Status, Educational attainment, Occupation, Monthly Income and
Number of Family Members?
What are the dimensions of the consumers’ choice factors for buying residential property?
What is the level of importance of the following consumers’ choice in terms of Price, Location, Safety and Security, Facilities and
Amenities, and Exclusivity?
Research Methodology
Self-constructed survey questionnaires were given online to 400 potential residential property buyers from any of the top 10 real
estate developers in the Philippines. Respondents should meet the following criterion:
18 years old and above.
Must have work; and,
Must have plans to buy residential property from any of the top 10 real estate developers in the Philippines.
Results and Discussion
Table 1 shows that the demographic profile of the respondents are primarily female (59.50%), 30 years old and below (76.00%),
single (83.25%), college graduate (70.75%), rank and file (61.00%), respondents with monthly income of Php20,000-Php39,999
(41.00%), and with family size of 1-5 members (64%).
Table 1: Demographic Profile of the Respondents
Exploratory Factor Analysis of the Study Constructs
The indicators of consumers’ choice for purchasing residential property were factor analyzed using principal component method with
varimax rotation to determine the underlying dimensions. The sample of 400 respondents is adequate enough for factor analysis to
proceed as indicated by Kaiser-Mayer Olkin measure of sampling adequacy. A reliability coefficient (Cronbach Alpha) was computed
for each factor dimension to estimate the computed reliability of each scale. All factors reliability with a reliability coefficient above
0.700 were considered acceptable in this study. This resulted to reliability coefficients ranging from .704 to .922 for all factor
dimensions of the constructs. Final reduction in the number of items was done by discarding all items with factor loading and
communalities of less than 0.40, eigenvalue of less than 1 and percent variance of less than 4%.
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Lee & Ong, International Journal of Research in Business & Social Science 9(4)(2020) 271-276
Table 2: Exploratory Factor Analysis of Consumers’ Choice
Table 2 shows the exploratory factor analysis of consumers’ choice. The first factor, labeled as Safety and Security, refers to
consumer’s choice which gives importance on the availability of water sprinklers, smoke detectors, fire extinguishers, CCTV and
security guards. Factor 2, labeled as Price, pertains to the flexibility of payment terms and conditions, flexibility of payment schemes,
discounts, interest rates and the affordability of the residential property. Factor 3, labeled as Facilities and Amenities, refers to the
availability of gym or fitness center, sports facilities, swimming pool and Wi-Fi. Factor 4, labeled as Location, pertains to the
proximity to church, hospital, mall/market, availability of transportation line and proximity of the property to place of work. And the
last factor labeled as Exclusivity, refers to the total number of units in the project, neighborhood, mixed property, type of residential
property and pure residential.
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Lee & Ong, International Journal of Research in Business & Social Science 9(4)(2020) 271-276
Table 3: Level of Importance of the Consumers' Choice Factors
Table 3 shows the level of importance of the consumers’ choice factors. Based from the results, four out of five factors are rated very
high important namely: price, location, safety and security, and facilities and amenities. Among the 5 consumers’ choice factors for
buying residential property, the number one consideration is the safety and security (Mean = 5.530, SD = 0.741), followed by price
(Mean = 5.488, SD = 0.668), then location (Mean = 5.424, SD = 0.680), and lastly, the facilities and amenities (Mean = 5.266, SD =
0.846). On the other hand, exclusivity is rated high important in terms of buying residential property (Mean = 4.983, SD = 0.719).
Conclusions
The demographic profile of the respondents are primarily female, 30 years old and below, single, college graduate, rank and file,
respondents with monthly income of Php20,000-Php39,999, and with family size of 1-5 members.
All factors reliability was considered acceptable in this study. Four out of five consumers’ choice factors are rated very high important
namely: price, location, safety and security, and facilities and amenities. On the other hand, exclusivity is rated high important in
terms of buying residential property.
The study is only limited to potential residential property buyers from any of the top 10 developers in the Philippines. It is
recommended for the future researchers to increase the scope of the study to top 20 developers in order to make the research more
distinct and more expressive.
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Lee & Ong, International Journal of Research in Business & Social Science 9(4)(2020) 271-276
This research focused on the 5 consumers’ choice factors mainly price, location, safety and security, facilities and amenities, and
exclusivity. According to Bloomberg, the gaming market has enticed about 100,000 Chinese employees in Metro Manila area since
2016 (Sohlberg, 2019). It is endorsed for future researchers to use additional variable such as Feng Shui for the reason that a grew
number of Chinese purchasers give to the present and upcoming growth.
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