Analyzing House Purchase Behavior of Consumers in Sabah

This report examines the house purchasing behavior of consumers in Sabah, Malaysia. It begins with an overview of consumer buying behavior and its significance, followed by an analysis of household debt and housing loan approval rates in Sabah. The report outlines the aim, research objectives, and research questions, including the influence of house purchasing behavior. Chapter 2 reviews the literature, presenting the Theory of Buyer Behavior Model and discussing factors such as house prices, location, and developer brands. A research framework and hypotheses are established, linking financing, distance, environment, and developer brand to consumer house purchase behavior. Chapter 3 details the research methodology, including the deductive research approach, data collection methods (primary data), and sample size determination. The conclusion summarizes key findings, emphasizing the multifaceted nature of house purchasing decisions and the importance of organizational factors. The report references various books, journals, and online sources to support its analysis. The report is a comprehensive analysis of the factors that impact consumer decisions when purchasing houses in Sabah, Malaysia, covering both the theoretical background and the practical implications for developers and the real estate market.

House Purchase Behavior of
Consumers in Sabah, Malaysia
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TABLE OF CONTENTS
Title..............................................................................................................................................................2
Chapter 1: Introduction...............................................................................................................................3
Overview..................................................................................................................................................3
Aim..........................................................................................................................................................6
Research objective.......................................................................................................................................6
Research question.......................................................................................................................................6
Q2 What is the influence of house purchasing behavior of consumers in Sabah?...................................6
Significance of the study..........................................................................................................................6
Chapter 2: Literature Review.......................................................................................................................6
Research Framework...................................................................................................................................8
Hypotheses..................................................................................................................................................8
Chapter 3: Research Methodology..............................................................................................................8
Research approach..................................................................................................................................9
Data Collection........................................................................................................................................9
Sample Size.............................................................................................................................................9
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................11
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Title
To understand the impact of house purchasing behavior of consumers in Sabah, Malaysia.
* Chapter 1: Introduction
* Overview
Consumer buying behavior is considered as a total of various factors such as the behavior
of consumer, their preference, decisions regarding some specific product or service. It can also
be classified as a systematic way that is being followed by the consumers when it comes for any
sort of purchasing or buying (Wang, Malthouse and Krishnamurthi, 2015). The research is about
discussing the impact of house purchasing behavior in Sabah. This chapter includes the
background, problem statement, research objectives, research question and the significance of
the study .
Background
In year 2015, as per the statistics of Bank Negara statistics, Malaysia’s household debt
rose to a new high of 89.1% of gross domestic product (GDP) in 2015 from 86.8% of 2014 GDP,
out of the total GDP, 56% was obtained to fund acquisition of residential properties (MIDF,
2016)
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Figure 1.1: Household Debt Components 2015
Source: MIDF Research 2016
Figure 1.1 has shown that, household debt for residential property components hold the
highest portion among the total GDP. It shows that houses are favorable investment in
Malaysia.
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Figure 1.2: Housing Loans Approval Rate
(Source: Housing Watch 2016)
Refer to figure 1.2, it shows the housing loans approval rate for Sabah. The average approval rate
was 73.3%. The Star (2017) had reported that overall loan approval rate is 74.2% whereby 50%
of the applicants are purchasing properties below RM500k .
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*
* Aim
To understand the influence of house purchasing behavior of consumers in Sabah.
* Research objective
* To analyze the concept of house purchasing behavior.
* To determine the impact of house purchasing behavior in Sabah.
* To recommend ways of improving the influence of house purchasing behavior in Sabah.
* Research question
Q1. What is the idea of house purchasing behavior?
* Q2 What is the influence of house purchasing behaviour of consumers in Sabah?
* Significance of the study
The value of this research is to find out factors that influences consumers behavior on
house purchase in Sabah. It focuses on the factors influenced house buyers in Sabah. The
preferences of Sabah house buyers will be discussed in this research and it may create awareness
to the house developer too. At the same time, view on the general behavior will be provided and
as well as the investment strategies will be shown in this study too. Therefore, this present study
aims to examine whether the factors namely financing, distance, environment, and developer
brand that could influence consumer’s behavior to purchase a house in Sabah.
* Chapter 2: Literature Review
Buyer purchase intention has positive relationship with purchase behavior on
residential property. The Theory of Buyer Behavior Model is as shown in Figure 2.1 below.
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Figure 2.1 : Theory of Buyer Behaviour Model (Howard & Sheth 1973, Loudon & Della Bitta,
1993)
Several critical stages have developed the business practices nowadays. In Malaysia
property market, there has been an ever-increasing price rise over the recent year. The price of
property in Malaysia is high and resulting some level of the people hardly to own a house
(Vigneron and Johnson, 2017).
When there is a better understanding of factors that would influence property buying
behavior. It has been emphasized that economists have characterized housing as a bundle of
attributes. Some of these attributes are derived from the internal characteristics of the house unit
itself such as the rooms available, whilst examples of external are location, accessibility to
utilities, services and facilities (Vohs and Baumeister, 2016).
People have many concerns while investigating for properties because it must be in a way
that it can be able to satisfy the basic requirements of the person along with the financial needs as
well. On the basis of the locality and surroundings around, the price factor can be forwarded to
the person who is interested in purchasing some property over there (East and Vanhuele, 2016).
It has been pointed out that most previous real estate studies had been based on
neoclassical economics, where consumers were expected to make real estate decisions that
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maximize their utility and wealth given price and income constraints (Goworek and McGoldrick,
2015).
House price, loan, income are in relations with house purchase. Financial consideration
especially house price has a very strong influence on house purchase intention. Also, developer
brand is regarded as important consideration made by a house buyer.
* Research Framework
It is important to have research frameworks in every study in order to have outlook
of the study and it helps us identify the relationship on the variables. Figure 2.1 shows the
research framework of this study which relates the independent variables with the
dependent variables (Armstrong and Brennan, 2015).
* Hypotheses
Based on the study done by others on factors that influences house purchase behavior of
consumers, few hypotheses were listed as follows:
H1: There is a significant relationship between financing and consumer house purchase behavior.
H2: There is a significant relationship between distance and consumer house purchase behavior.
H3: There is a significant relationship between environment and consumer house purchase
behavior.
H4: There is a significant relationship between developer and consumer house purchase
behavior.
* Chapter 3: Research Methodology
Research is considered as a way of investigating about various new facts and figures that
can help in making the research more effective. Different aspects of research are discussed as
under :
* Research approach
Research approach is considered as a way that can be implemented in the beginning of
the research in order to carry out the research more effective and appropriate. Research approach
can be further classified in two ways, inductive and deductive. Inductive approach deals with
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developing new facts and theories whereas deductive approach is associative with the aimed
theories. So, in this research, the researcher will make use of the deductive approach because it
can help in providing a better analysis of the influence that house purchasing behavior is having
in Sabah (Horner and Swarbrooke, 2016).
* Data Collection
The gathering of data is considered as collecting the data in order to make the research
more effective and appropriate. It can be done in two ways, either by the primary collection or by
the secondary one. Primary collection of data is considered as that collection which is being done
at the first time whereas secondary collection means that the data has already been gathered
McCarthy& Perreault 1993by some external body. Various sources of primary collection
involves focused groups, surveys, interviews and questionnaires. Different sources of secondary
collection involves the information from books, online, journals etc. In this research, the
researcher will make use of the primary data because it can help in providing a better analysis of
the influence of house purchasing behavior in Sabah (Juster, 2015).
* Sample Size
Based on statistic published by Department of Statistics Malaysia, Sabah has total
population of approximately 3.87 million in year 2017. As per a study, the study sampling size
will be 384 units as the population is more than 1 million. Questionnaires will be distributed to
400 working adults in order to have significant analysis and result.
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Figure 3.1: Table for determining sample size from a given population
Source: Krejcie and Morgan (1970)
* CONCLUSION
It can be concluded from the research that house purchasing behavior depends on a
variety of factors. It has an equal influence on the organization as well. Also, there is a huge role
of the services and operations that are being provided by the organizations. A proper review has
also been done on the basis of the themes and objectives. Different aspects of the research
methodology have also been included.
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REFERENCES
Books and Journals
Juster, F. T., 2015. Anticipations and purchases: An analysis of consumer behavior. Princeton
University Press.
Horner, S. and Swarbrooke, J., 2016. Consumer behaviour in tourism. Routledge.
Armstrong, G. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.
East, R. and Vanhuele, M., 2016. Consumer behaviour: Applications in marketing. Sage.
Wang, R. J. H., Malthouse, E. C. and Krishnamurthi, L., 2015. On the go: How mobile shopping
affects customer purchase behavior. Journal of Retailing. 91(2). pp.217-234.
Vohs, K. D. and Baumeister, R. F. eds., 2016. Handbook of self-regulation: Research, theory,
and applications. Guilford Publications.
Vigneron, F. and Johnson, L. W., 2017. Measuring perceptions of brand luxury. In Advances in
Luxury Brand Management(pp. 199-234). Palgrave Macmillan, Cham.
Goworek, H. and McGoldrick, P., 2015. Retail marketing management: Principles and practice.
Pearson Higher Ed.
Online
Chin, C. (2013). Young professionals struggle to own property. The Star Online. [Online]
Available at: http://www.thestar.com.my/News/Nation/2013/07/14/Dad-dont-kick-me-
out-yet.aspx/
Economic Review Household Debt, MIDF Research 2016. [Online] Available at:
http://www.midf.com.my/images/Downloads/Research/Econs-Msia-Household-Debt-
MIDF-220816.pdf
The Star. (2017) Bank Negara: Housing loan approval rates remain high. [Online] Available at:
https://www.thestar.com.my/business/business-news/2017/07/15/bank-negara-housing-
loan-approval-rates-remain-high/
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