CHAPTER 3
THEORETICAL FRAMEWORK
3.1 DEFINITION OF CONSUMER:
A consumer is a person or a group who
intends to order, or use purchased goods,
products, or services primarily for
personal, social, family, household and
similar needs, who is not directly related to
entrepreneurial or business activities. The
term most commonly refers to a person who
purchases goods and services for personal
use.
3.2 MEANING OF CONSUMER:
A consumer in real estate refers to any individual, business, or institution that engages
in the real estate market by purchasing, renting, leasing, or investing in properties.
Consumers can be categorized into residential, commercial, and investment segments,
each with distinct motivations and decision-making factors.
Residential consumers include first-time homebuyers, luxury buyers, second-home
buyers, and renters, all influenced by factors such as affordability, location, amenities,
and financing options. Economic conditions, government policies, and demographic
shifts further influence the demand and pricing of homes.
Commercial consumers, such as corporate buyers, retail businesses, and co-working
space users, seek properties for business operations and expansion. Real estate
investors, including individuals and institutions, purchase properties for rental income,
capital appreciation, or portfolio diversification. Commercial real estate serves as a
crucial asset for businesses, providing physical space for operations, customer
interactions, and storage.
Various factors, including economic conditions, market trends, government policies,
sustainability concerns, and digital transformation, influence real estate consumers’
choices. Their demand patterns shape property prices, urban development, and overall
real estate market dynamics.
3.3 DEFINITION OF CONSUMER BEHAVIOUR:
Consumer behaviour refers to the study
of how individuals, groups, or
organizations select, buy, use, and
dispose of goods, services, ideas, or
experiences to satisfy their needs and
wants. It involves analyzing
psychological, social, cultural, and
economic factors that influence
purchasing decisions.
3.4 MEANING OF CONSUMER BEHAVIOUR:
Consumer behaviour in real estate refers to the psychological, economic, and social
factors that influence how individuals and businesses choose, purchase, lease, or invest
in properties. It involves a complex decision-making process driven by needs,
preferences, financial capacity, market conditions, and external influences like
economic policies and technological advancements.
For residential buyers, factors such as location, affordability, mortgage rates,
neighbourhood safety, infrastructure, and future resale value play a crucial role in the
decision-making process. First-time homebuyers often prioritize budget-friendly
options, access to workplaces, and financing options, whereas luxury buyers focus on
exclusivity, architectural design, premium amenities, and long-term investment
potential. Sustainability has also become a key factor, with environmentally conscious
buyers seeking energy-efficient homes with green certifications.
In commercial real estate, businesses and investors assess properties based on factors
such as foot traffic, accessibility, proximity to business hubs, rental yield, and overall
economic stability. Corporate buyers look for office spaces that align with employee
convenience, brand positioning, and flexible lease agreements. Retail investors focus
on locations with high consumer engagement, while industrial property buyers consider
logistics, warehouse efficiency, and transportation links.
3.5 DEFINITION OF REAL ESTATE:
Real estate is defined as the land and any
permanent structures, like a home, or
improvements attached to the land, whether
natural or man-made.
Real estate is a form of real property. It
differs from personal property, which is not
permanently attached to the land, such as
vehicles, boats, jewellery, furniture, and
farm equipment.
3.6 MEANING OF REAL ESTATE:
Real estate is a broad term that encompasses land, buildings, and any permanent
structures attached to them. It includes both natural resources, such as water and
minerals, and man-made developments like residential homes, commercial properties,
and industrial complexes. Real estate serves as a fundamental component of modern
society, providing spaces for living, working, and business operations.
The real estate market is influenced by various factors, including location, economic
conditions, infrastructure development, and government policies. Property values
fluctuate based on demand and supply, interest rates, and investor sentiment. Buyers
and investors analyze these factors carefully to make informed decisions, whether
purchasing a home, leasing office space, or acquiring land for development.
Real estate is also a major asset class, offering investment opportunities through
property ownership, rental income, and capital appreciation. Many individuals and
businesses invest in real estate as a means of wealth creation and financial security.
Additionally, trends such as sustainability, digital transformation, and changing
consumer preferences continue to reshape the real estate industry, influencing how
properties are bought, sold, and utilized.
