A Study On Attributes influencing home buyers

purchase decisions.

A Project report submitted to

Vels university
In partial fulfilment of the requirement for the degree of

BACHELOR OF BUSINESS ADMINISTRATION

Submitted by

R.BALAJI (13101110)

C.GOKUL (13101114)

V.PARTHIBAN (13101128)

S.LIYAKATH ALI KHAN (13101154)

 Introduction

Human being is a unique creation of this world. As humans, people need to have

certain essential things for survival. The basic amenities of living for people are food,

clothing and shelter. For shelter people need a house. But the land available is limited.

The best use of land for shelter is building of the apartment. This way minimum land

can be utilized for the shelter of maximum people.

In today's rapidly changing world, there is a drastic change in the life style of the

people. People prefer to have a comfortable living with modern dressing styles and

rich looks, sumptuous food, air-conditioned rooms, luxury cars and homes with all

facilities/ amenities. They want to fulfill their lifetime ambition of owning a beautiful

house with an aesthetical appeal and they attain the status of "customers" in the

context of home-buying once they complete the transaction of purchase or occupy a

residential house or apartment as an owner; such home-buying customers actually

influence the demand of a construction project.The Buyer decision process is the

decision-making process used by consumers regarding market transactions before,

during, and after the purchase of a good or service.

More generally, decision-making is the cognitive process of selecting a course

of action from multiple alternatives. Common examples include shopping and

deciding what to eat. Decision-making is a psychological construct. This means that

although a decision can not be "seen", we can infer from observable behaviour that a

decision has been made. Therefore we conclude that a psychological "decision-

making" event has occurred. It is a construction that imputes commitment to action.

That is, based on observable actions, we assume that people have made a commitment

to effect the action.

 There are generally three ways of analysing consumer buying decisions:

 Economic models - largely quantitative and are based on the

assumptions of rationality and near perfect knowledge. The consumer

is seen to maximize their utility. See consumer theory. Game theory

can also be used in some circumstances.

 Psychological models - psychological and cognitive processes such as

motivation and need recognition. They are qualitative rather than

quantitative and build on sociological factors like cultural influences

and family influences.

 Consumer behaviour models - practical models used by marketers.

They typically blend both economic and psychological models.

Nobel laureate Herbert A. Simon sees economic decision-making as a vain attempt to

be rational. He claims (in 1947 and 1957) that if a complete analysis is to be done, a

decision will be immensely complex. He also says that peoples' information

processing ability is limited. The assumption of a perfectly rational economic actor is

unrealistic. Consumers are influenced by emotional and nonrational considerations

making attempts to be rational only partially successful

Purchase Decisions

John is a recent college graduate, and he has finally landed his first job. John works as
a paralegal for the state of Georgia. The first three months of being a productive
citizen of the world have been great for him. No more Ramen noodles for breakfast,
lunch and dinner. No more shopping at the thrift store for clothes. Everything was
going well for John until one rainy morning. John's car broke down on the side of the
highway. Keep in mind, John is the fourth owner of his current vehicle. The previous
owners were his dad and two older siblings. By the time John got the car, it had
196,000 miles and had gone through a series of repairs by the previous family drivers.
Now, John is at a critical decision making cross roads that all buyers must face…
purchase decisions.

A purchase decision is exactly how it sounds. Specifically, when making a purchasing

decision there are five stages that consumers carry out.

1. Problem/Need Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Post-Purchase Behavior

These stages were introduced in 1910 by a psychologist name John Dewey.

According to Dewey, these stages are a framework to evaluate a consumer buying
behavior leading up to and after the purchase transaction has been completed. With
that being said, a consumer will not always follow these steps with every purchase.
For example, if a consumer wants a pack of M&Ms, the buyer will identify a need
(step one) then skip to step four (purchase decision). There will be no need to search
for information on the product or evaluate alternatives.

Why do you buy the things you do? How did you decide to go to the college you’re
attending? Where do like to shop and when? Do your friends shop at the same places
or different places?

Marketing professionals want to know the answers to these questions. They know that
once they do have those answers, they will have a much better chance of creating and
communicating about products that you and people like you will want to buy. That’s
what the study of consumer behavior is all about. Consumer behavior considers the
many reasons why—personal, situational, psychological, and social—people shop for
products, buy and use them, and then dispose of them.

Companies spend billions of dollars annually studying what makes consumers “tick.”
Although you might not like it, Google, AOL, and Yahoo! monitor your Web
patterns—the sites you search, that is. The companies that pay for search advertising,
or ads that appear on the Web pages you pull up after doing an online search, want to
find out what kind of things you’re interested in. Doing so allows these companies to
send you popup ads and coupons you might actually be interested in instead of ads
and coupons for products such as Depends or Viagra.

Massachusetts Institute of Technology (MIT), in conjunction with a large retail center,

has tracked consumers in retail establishments to see when and where they tended to
dwell, or stop to look at merchandise. How was it done? By tracking the position of
the consumers’ mobile phones as the phones automatically transmitted signals to
cellular towers. MIT found that when people’s “dwell times” increased, sales
increased, too.“The Way the Brain Buys,” Economist, December 20, 2009, 105–7.

Researchers have even looked at people’s brains by having them lie in scanners and
asking them questions about different products. What people say about the products is
then compared to what their brains scans show—that is, what they are really thinking.
Scanning people’s brains for marketing purposes might sound nutty. But maybe not
when you consider the fact is that eight out of ten new consumer products fail, even
when they are test marketed. Could it be that what people say about potentially new
products and what they think about them are different? Marketing professionals want
to find out.“The Way the Brain Buys,” Economist, December 20, 2009, 105–7.

Studying people’s buying habits isn’t just for big companies, though. Even small
businesses and entrepreneurs can study the behavior of their customers with great
success. For example, by figuring out what zip codes their customers are in, a
business might determine where to locate an additional store. Customer surveys and
other studies can also help explain why buyers purchased what they did and what their
experiences were with a business. Even small businesses such as restaurants use
coupon codes. For example, coupons sent out in newspapers are given one code.
Those sent out via the Internet are given another. Then when the coupons are
redeemed, the restaurants can tell which marketing avenues are having the biggest
effect on their sales.

Neuroscience is a useful tool and a source of theory development and testing in buyer

decision-making research. Neuroimaging devices are used in Neuromarketing to

investigate consumer behaviour.[1]

Due to normal psychology, there are five stages consumers experience with a

purchase

 Problem/Need Recognition - Recognize what the problem or need is and

identify the product or type of product which is required.

 Information Search - The consumer researches the product which would

satisfy the recognized need.

  Evaluation of Alternatives - The consumer evaluates the searched alternatives.

Generally, the information search reveals multiple products for the consumer

to evaluate and understand which product would be appropriate.

 Purchase Decision - After the consumer has evaluated all the options and

would be having the intention to buy any product, there could be now only

two things which might just change the decision of the consumer of buying the

product that is what the other peers of the consumer think of the product and

any unforeseen circumstances. Unforeseen circumstances for example in this

case could be financial losses which led to not buying of the product.

 Post Purchase Behaviour - After the purchase the consumer may experience

post purchase dissonance feeling that buying another product would have been

better. addressing post purchase dissonance spreads good word for the product

and increases the chance of frequent repurchase.

A case study research is also conducted to study the buying behavior of the real estate

products of In a case study, the research questions are set up with limitations

according to the findings in former case study. With the help of a empirical analysis

and the case study, this research will be achieve in terms of both of

comprehensiveness and depth.

Buying a house is the largest spending in most household budgets. That

consumer expenditure importance to the economics of the country as it also

importance to serve the psychological and social need. People who buy homes not

only for a shelter but they are also seeking to express their values and aspirations.
Study on housing choice has developed by understanding the housing preferences

based on home buyers demographic factors such as age, household composition,

income and current housing situation. Such factors are initially will influences the

buyers decision to buy a house. By understanding the consumer preferences and

influenced factors can summarized the ideas of actual demand in the market.
 Objectives

1.To study the factors that affects purchase decision of residential flat in
the study areas.

2.This research aims to find out what are the factors that attract the buyers
to buy houses.

3.To identify the housing attributes that have the most influence on home
buyers’ purchase decisions.

4.To determine whether the service quality provided by residential

housing suppliers significantly affects home buyers’ purchase decisions.

5. To assess the influence of the socio-demographic characteristics of

home buyers on the housing attributes and service preferences that
influence their housing purchase decisions.
Chennai Prince Land
Chennai Prince Land is one of the most active and sought after property portals by
individuals, brokers, companies and other associations, who are looking for land, flat,
individual houses and other commercial properties to buy, sell or rent.. It provides a
dais to showcase your properties for selling or for renting out in Chennai. Chennai
Prince Land provides advertisement of properties of interest for buyers and sellers and
these expressions of interest are offered with complete integrity, clarity and
transparency. Chennai Prince Land just facilitate the transactions that would take
place between two parties but is not responsible for any monetary transaction that is a
result of this interaction, nor is it a party in the negotiation. It would not be
responsible for any dispute between the buyer and the seller and cannot be requested
to settle any altercation.

COMPANY HISTORY
Chennai Prince Land, was founded by Vasudevan in 2008, after he spent eight
successful years in the commercial real estate brokerage business with a large firm in
Chennai. Dominic Pavia had the vision to expand beyond facilitating traditional sale
and lease transactions and provide a complete range of sales, leasing, consulting,
development, and management services. With a large portfolio of property listings
and clients throughout, Chennai Prince Land is prepared to fulfil all commercial real
estate requirements. In 2015 we expanded our markets by becoming licensed in
Chennai Prince Land Promoters has been assessed and conforms to the quality
management system standard for its design, development, construction and promotion
of residential building, and issued with ISO 9001 : 2008 certificate.

BROKERAGE RELATED SERVICES

Brokerage represents the core business function of the company. Chennai Prince Land
professionals specialize in office, industrial, investment and retail properties. The
company’s proven track record in property disposition demonstrates a thorough
understanding of building construction, valuation, marketing and tenant/landlord
representation.

CONSULTING SERVICES

Consulting Services provide complementing support, including property and tenant

evaluation, opinions of value, financial analysis, including lease and cash flow
analysis, financing, economic incentives, and market research. Support personnel
provide reliable information necessary to assist companies of any size.
MANAGEMENT SERVICES

Chennai Prince Land provides portfolio analysis and property management, whether
on a short-term basis during the marketing and disposition period, or on a long-term
basis in the marketing and management of investment and retail properties. Chennai
Prince Land specializes in managing risk to maximize our client’s return.

Vision
"To be a brand that is admired as an industry leader for its thoughtfully designed high
quality innovative lifespaces, is recognized for its customer and people practices and
is acknowledged for fostering long term relationship with stakeholders"
Real Estate Industry in India
Introduction :
The real estate sector is one of the most globally recognised sectors. In India, real
estate is the second largest employer after agriculture and is slated to grow at 30 per
cent over the next decade.

The Indian real estate market has become one of the most preferred destinations in the
Asia Pacific1 as overseas funds accounted for more than 50 per cent of all investment
activity in India in 2014, compared with just 26 per cent in 2013.

The real estate sector comprises four sub sectors - housing, retail, hospitality, and
commercial. The growth of this sector is well complemented by the growth of the
corporate environment and the demand for office space as well as urban and semi-
urban accommodations.

The construction industry ranks third among the 14 major sectors in terms of direct,
indirect and induced effects in all sectors of the economy.

It is also expected that this sector will incur more non-resident Indian (NRI)
investments in both the short term and the long term. Bengaluru is expected to be the
most favoured property investment destination for NRIs, followed by Ahmedabad,
Pune, Chennai, Goa, Delhi and Dehradun.

Market Size

The Indian real estate market is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product
(GDP).

In the period FY08-20, the market size of this sector is expected to increase at a
Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality and
commercial real estate are also growing significantly, providing the much-needed
infrastructure for India's growing needs.

During the first nine months of 2015, PE funds invested about US$ 2.4 billion in the
real estate sector, across 53 transactions compared US$ 1.3 billion across 57
transactions in the same period last year. Deal sizes have also increased in 2015, and
residential projects both luxury and affordable have attracted a substantial amount of
capital.

Private Equity (PE) funds and Non-Banking Financial Companies (NBFCs) in India
are seen increasingly investing jointly in real estate projects, in order to hedge risk and
undertake bigger transactions.

Mumbai is the best city in India for commercial real estate investment, with returns of
12-19 per cent likely in the next five years, followed by Bengaluru and Delhi-National
Capital Region (NCR). Also, Delhi-NCR was the biggest office market in India with
110 million sq ft, out of which 88 million sq ft were occupied. Sectors such as IT and
ITeS, retail, consulting and e-commerce have registered high demand for office space
in recent times.

India's office space absorption stood at 35 million sq ft during 20152, which is the
second highest figure in the India's history after 2011, and was driven by corporates
implementing their growth plans.

India had the strongest activity in office leasing space in Asia and accounted for half
of Asia’s total office leasing in third quarter of 2015, with Delhi being the most active
market3.

Delhi’s Central Business District (CBD) of Connaught Place has been ranked as the
sixth most expensive prime office market in the world with occupancy costs at US$
160 per sq ft per annum.

Key drivers for retail growth in India

• Booming consumerism in India

• Organised retail sector growing 25-30 per cent annually

• Entry of MNC retailers

• India's population below 30 years of age having exposure to global retail are
expected to drive demand for organised retail

Investments

The Indian real estate sector has witnessed high growth in recent times with the rise in
demand for office as well as residential spaces. According to data released by
Department of Industrial Policy and Promotion (DIPP), the construction development
sector in India has received Foreign Direct Investment (FDI) equity inflows to the
tune of US$ 24.156 billion in the period April 2000-September 2015.

Some of the major investments in this sector are as follows:

 Edelweiss Alternative Asset Advisors Ltd plans to raise US$ 1 billion for its
first residential real estate fund called the Edelweiss Real Estate Fund, which
will finance investments in five property markets in India - National Capital
Region (NCR), Mumbai, Pune, Bengaluru and Chennai.
 Quikr, an online classifieds platform, has acquired real estate portal
Commonfloor.com for US$ 200 million in a stock-cum-cash deal.
 Edelweiss Alternative Asset Advisors and Milestone Capital are investing Rs
7,200 crore (US$ 1.08 billion) in India’s real estate sector while private equity
firms like Goldman Sachs, Warburg Pincus and Singapore’s GIC are exploring
viable projects for investments, as a result of government’s effort to boost real
estate sector.
 Macquarie Infrastructure and Real Assets (MIRA), the realty investment arm
of Australian Macquarie Group Ltd, plans to invest in real estate projects in
 India and is in talks with Tata Housing Development Co. to jointly set up an
investment platform.
 Google Capital has invested in Bengaluru-based online property search
platform, CommonFloor.com.
 Omkar Realtors and Developers Private Limited is in discussions to raise Rs
400 crore (US$ 60 million) from KKR India, the local arm of PE firm
Kohlberg Kravis Roberts and Co.
 Goldman Sachs bought shares worth Rs 255 crore (US$ 38.3 million) in
Vatika Hotels Private Limited, a company owned by real estate and hospitality
firm Vatika Group.
 SoftBank, Falcon Edge Capital and a few others invested US$ 90 million in
Locon Solutions Private Limited, which runs Housing.com - a realty website.
 Real estate firm Supertech has planned to invest about Rs 2,000 crore (US$
300 million) in Gurgaon over the next few years by launching several luxury
and affordable projects.
 PE firm Warburg Pincus invested Rs 1,800 crore (US$ 270 million) in Piramal
Realty for a minority stake in the company.
 China’s Fosun International Limited is seeking to invest US$ 100 million in
Locon Solutions, the owner of Housing.com.

Government Initiatives

The Government of India along with the governments of the respective states has
taken several initiatives to encourage the development in the sector. The Smart City
Project, where there is a plan to build 100 smart cities, is a prime opportunity for the
real estate companies. Below are some of the other major Government Initiatives:

 The Government of Rajasthan became the first state to initiate private

investments in affordable housing by signing four Memoranda of
Understanding (MoUs) with private players for an investment of Rs 5,400
crore (US$ 810 million).
 The Ministry of Housing and Urban Poverty Alleviation (HUPA) has
commissioned a study by Indian Institute of Technology, Kanpur on testing of
new construction technologies, with the objective of promoting new housing
technologies in the country.
 India’s Prime Minister Mr Narendra Modi approved the launch of Housing for
All by 2022. Under the Sardar Patel Urban Housing Mission, 30 million
houses will be built in India by 2022, mostly for the economically weaker
sections and low-income groups, through public-private-partnership (PPP) and
interest subsidy.
 The Government of India has relaxed the norms to allow Foreign Direct
Investment (FDI) in the construction development sector. This move should
boost affordable housing projects and smart cities across the country.
 The Securities and Exchange Board of India (SEBI) has notified final
regulations that will govern real estate investment trusts (REITs) and
infrastructure investment trusts (InvITs). This move will enable easier access
to funds for cash-strapped developers and create a new investment avenue for
institutions and high net worth individuals, and eventually ordinary investors.
 The Government of Maharashtra announced a series of measures to bring
transparency and increase the ease of doing business in the real estate sector.
 The State Government of Kerala has decided to make the process of securing
permits from local bodies for construction of houses smoother, as it plans to
 make the process online with the launch of a software called 'Sanketham'. This
will ensure a more standardised procedure, more transparency, and less
corruption and bribery.

Road Ahead

Responding to an increasingly well-informed consumer base and, bearing in mind the

aspect of globalisation, Indian real estate developers have shifted gears and accepted
fresh challenges. The most marked change has been the shift from family owned
businesses to that of professionally managed ones. Real estate developers, in meeting
the growing need for managing multiple projects across cities, are also investing in
centralised processes to source material and organise manpower and hiring qualified
professionals in areas like project management, architecture and engineering.

The growing flow of FDI into Indian real estate is encouraging increased
transparency. Developers, in order to attract funding, have revamped their accounting
and management systems to meet due diligence standard

The S&P BSE Realty index rose 16% this year till December 10. Much of it was due
to rise in stock markets as a whole as there was no improvement in fundamentals of
real estate companies in this period.

The debt of the 29 listed real estate companies whose results were available till March
31 was Rs 35,979 crore in March-end compared to Rs 34,906 crore in March 2013.
Their operating profit in the first half of the current financial year rose slightly to Rs
3,655 crore from Rs 3,402 crore in the same period last year.

Real estate investments also gave poor returns as prices remain subdued in most
markets, especially in the residential space. The table, Counting Gains, shows 0-6%
rise in prices in 10 markets (Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata,
Pune, Noida, Gurgaon, Bhiwadi and Mumbai) in the one year to September-end. The
real returns were negative considering 6-9% consumer price inflation. For those who
took loans, which cost 10-10.5% a year, to buy a house, the returns were worse.
 Counti
ng
gains

Howev
er,
there
are
some
positiv
e
signals
as
well.
Inflati
on has
been falling for the past one-two months and the Reserve Bank of India has hinted at
cutting interest rates if the trend continues. The economy is showing signs of
recovery. The government, too, has taken steps to support the real estate industry.

SITUATION GRIM

As far as returns are concerned, 2014 was not the best of years. Sales were poor and
dragged down prices. "The key issue is low demand. Even though the sentiment is up,
enquiries are not converting into sales. Builders are holding on from launching new
projects," says Prashan Agarwal, co-founder, proptiger.com.

High inventories and low absorption rate (it tells how many months it will take for the
inventory to be cleared given current monthly sales) indicate it will take time for
things to pick up. As per data by Liases Foras, a Mumbai-based research firm, as on
September, the number of months needed to clear the inventory in six major markets
is 50. These markets are Bengaluru, Chennai, Hyderabad, Mumbai Metropolitan
Region or MMR and Delhi-National Capital Region or Delhi-NCR. The situation is
worst in Delhi-NCR, where the period is 83 months or seven years. The figure is 50
for
MMR
and
Chenn
ai. For
Pune,
it is
23.

Invent
ory
pile-up

Even
the festive season failed to push sales. Developers' schemes also do not seem to be
working. These include those where buyers do not have to pay pre-EMI and
construction-linked plans. For instance, Lodha Meridian in Hyderabad offered buyers
gold vouchers up to Rs 4.5 lakh. Orris offered a Rs 500 per sq foot discount in its
projects in New Gurgaon while Bestech offered a Rs 400 per sq foot discount in its
Spa Next project on Golf Course Extension Road in Gurgaon. Four out of the six
cities mentioned above saw sales fall year-on-year (y-o-y) in the July-September
quarter, as per Liases Foras. Chennai saw the highest drop of 50%. The next was
NCR, where sales fell 45%. The exception was MMR, where sales rose 30%, and
Pune (65% rise). This is reflected in new launches, which fell 61% during the quarter.
Another issue that has dampened buyer sentiment is project delays. As per Liases
Foras, 60% projects that are marketable in Delhi-NCR have been delayed by at least
one year.

POSITIVE DEVELOPMENTS

Owners of commercial properties were slightly better off in 2014 as fall in capital
values increased rental yields. Experts say commercial properties are an attractive
investment at this moment. Read Business Sense to know what is in store for the
commercial sector in 2015.

POSITIVE DEVELOPMENTS

There were some positive developments in 2014 that would most likely bode well for
the sector in the coming year. One, the election of a stable government boosted
investor sentiment. Also, the government announced steps to bring relief to the sector.
Here is what the sector can look forward to in 2015.

REITs become real: The government has notified the regulations for real estate
investments trusts or REITs. These trusts will not only provide liquidity to developers
but also enable easier exits. REITs work like mutual funds and invest in property. The
income earned from these investments is distributed among unit holders.

The minimum investment for buying a unit of REIT will be Rs 2 lakh. They will not
only ensure regular income to unit holders but also protect their rights with stringent
regulations.

"REITs can make funding of real estate projects transparent. Some of the stringent
measures proposed in the earlier version of REIT guidelines have been relaxed to
make these instruments competitive globally," says Anuj Puri, chairman & country
head, JLL India.

FDI rule relaxation: The government has reduced the minimum floor area required
for foreign direct investment (FDI) in projects from 50,000 square metres (sq m) to
20,000 sq m. It has also reduced the minimum capital required from $10 million to $5
million, making more projects eligible for FDI. It has also done away with the three-
year lock-in period for FDI.

"The elimination of the lock-in is the most notable modification. Annual private
equity inflows, $1-1.5 billion per annum over the last few years, could double in the
next two years due to this," says Ramesh Nair, COO, Business & International
Director, JLL India.

Boost to affordable housing: High prices have made it difficult for most people to buy
a house. To tackle this, the finance minister announced a "housing for all by 2022"
plan in the 2014 Budget. To achieve this, he allocated Rs 4,000 crore to the National
Housing Bank for increasing the flow of credit for affordable housing.

The government has also notified some changes in rules for affordable housing. Now,
a project with 40% floor area ratio or floor space index for dwelling units with floor
area of not more than 140 sq m will be considered an affordable housing project as
against the earlier norm of 60% floor area ratio for dwelling units with floor area of
not more than 60 sq m.

WHAT THE INDUSTRY DEMANDS

Although the government has shown an inclination to support the sector, a lot has to
be done to bring growth back, say experts. "Two things must happen-new fuel must
be injected by way of incentives and stimulus packages and hurdles to speed removed.
While the new government has already shown willingness to support growth, the
environment in which the sector continues to operate is still far from ideal," says Puri
of JLL India.

"The sector needs big decisions related to interest rates, transparent approvals and a
regulatory body to safeguard the interests of customers," says Ajay Aggarwal,
managing director, Microtek Infrastructures.

Real Estate Regulation Bill: A house is usually a person's biggest investment. But
buying it can be a nightmare as absence of regulations means the buyer is at the mercy
of the developer. In case the developer does anything wrong, it is next to impossible
for the buyer to seek redress. This has become worse as absence of a regulator and
low entry barriers have led to a sharp increase in the number of developers.

"The sector continues its metamorphosis from unorganised to organised like its peers
in developed economies," says RK Arora, chairman, Supertech Ltd.

The real estate regulation Bill seeks to change this by having provisions for strict
punishments and penalties, which can go up to 5% cost of the project. It also has a
provision for putting wrongdoers behind bars if they fail to abide by certain laws. The
Bill also addresses issues such disclosure of the flat's exact area rather than the super
area (built-up area plus common areas such as lobby, lifts shaft, stairs, etc). It also has
provisions to ensure that the money raised for a project is not used for any other
project. Also, the developer will be able to launch a project only after taking all
clearances.

"Once appointed, the regulator will help the industry in two ways - it will instil
confidence in buyers worried about malpractices as well as remove complexity in the
approval process," says Agarwal of proptiger.com.
 NCR market is the worst-hit
Single window clearances: The
list of clearances required
varies from state to state but
the average number is 40.
These delays cost developers
as they pay 20-30% interest on
loans taken to buy land. Even
if a developer buys land from
his own money, he can't start
the project or market it
properly without clearances.
These delays add to the project
cost. This is ultimately passed
on to buyers. "Faster approvals
will beef up supply, bring
down prices," says Puri of JLL
India.

SHOULD ONE BUY OR

WAIT?

The improving economic

conditions and measures
introduced by the government
give hope of recovery, say
experts. But price cuts will be
difficult as margins are already
low, says Aggarwal of
Microtek Infrastructures.

"The increase in input costs

such as land, labour, cement,
etc, means prices will definitely rise in the coming years and there is no possibility of
a price correction in the years to come," says Arora of Supertech Ltd.

However, others believe that the price trend will depend upon the dynamics of
individual cities. "Each city has own market drivers and not all locations perform
uniformly. Basically, if a given city is seeing a lot of employment generation and,
hence, demand for homes or offices, prices will rise. Some of the cities where this is
being witnessed are Bengaluru, Pune, Hyderabad and Chennai," says Puri of JLL
India.

Prices will also depend on inventory levels and sales.



The home segment has steady absorption. Suburbs continue to witness the
launch of new residential projects at an accelerated pace -- Photo: M.
Karunakaran

The Hindu

The home segment has steady absorption. Suburbs continue to witness the
launch of new residential projects at an accelerated pace -- Photo: M.
Karunakaran
 

Will the first quarter of the new financial year be the

launch pad for growth of city realty? Stakeholders
hope so
The first quarter of the new financial year has begun and stakeholders in the housing
sector are looking for better days ahead.

Property seekers want prices to stabilise, and developers have been waiting longer for
prices of construction material to drop. The salaried class and lower-income groups
want the government to give greater thrust to affordable housing.

There have already been positive signs for the year, and realtors have been calling
2015 the ‘year of recovery’.

Multi-crore property transactions of prime property have been completed and

consultants and builder are busy scouting for new land for developing both residential
and office space, sources in the construction industry say.
When it comes to the office space market in Chennai, supply is limited and narrowing
while the demand is high. On an average, the demand is for about four million sq. ft.
every year. The vacancy level, which was around 25 per cent, is now 16 per cent.

Interestingly, this 16 per cent is in ‘wrong locations’ where companies want their
property to come up. “There are some vacancies on Rajiv Gandhi Salai (Old
Mahabalipuram Road) in Sholiganallur and also beyond Navalur. But not many seem
to be opting for those spaces. On Rajiv Gandhi Salai, on the pre-toll stretch, there is
only a marginal amount of space available,” says a real estate consultant.

Residential projects

“Commercial space is at its peak. There is no space in grade A or B locations,” says T.

Chitty Babu, chairman and chief executive officer of Akshaya Homes.

On the residential front, Chitty Babu says the home segment has steady absorption.
Suburbs — be it Padi (Uni5, S and S Foundations), Medavakkam–Perumbakkam
(Wow and Superb, respectively), Tambaram or Pallavaram (Winchester) — continue
to witness the launch of new residential projects in an accelerated pace.

Some of the key indicators revealed in the monthly study by Jones Lang LaSalle are
on predictable lines, with Adyar region topping rental values, which are on the rise in
suburban pockets.

----------------

INFOBOX:

REALTY TRENDS

Here are some key indicators of trends in real estate development in the past
month

OFFICE SPACE

Key areas Rental Value (In Rs. per sq. ft. per month)

ANNA SALAI 60 to 85

R.K. SALAI 65 to 85

PRE-TOLL OMR 40 to 70

POST-TOLL OMR 25 to 35

GUINDY 45 to 65

Major office space transactions: Arunatech, OMR; Pintron, Mount-Poonamallee

Road

--------------------

RETAIL SPACE

Key areas Rental Value (In Rs. per sq. ft. per month)

T. NAGAR 120 to 180

NUNGAMBAKKAM 130 to 150

VELACHERY 80 to 120

PRE-TOLL OMR 80 to 100

ANNA NAGAR 120 to 150

L.B. ROAD, ADYAR 100 to 140

Major retail space transactions: Menchis Frozen Yoghurt, Khader Nawaz Khan
Road; Focus Art Gallery, T.T.K. Road; Aasife and Brothers Biriyani Centre,
Anna Salai

-------------------------------------

RESIDENTIAL SPACE

Key areas Rental Value (per month)

ADYAR 20,000 to 30,000

ANNA NAGAR 15,000 to 25,000

SHOLINGANALLUR 9,000 to 12,000

TAMBARAM 6,000 to 12,000

MEDAVAKKAM 7,000 to 14,000

It's still too early to count the losses from the unprecedented floods and torrential rains
in Chennai that have impacted people from all walks of life, but one of the worst hit
businesses clearly is real estate.

Besides wastage of hundreds of tonnes of building materials such as cement and sand
at construction sites and losses due to inordinate project delays, developers are also
staring at the possibility of losing their recent sales momentum.

According to real estate consultancy Jones Lang LaSalle India, the Chennai property
market was demonstrating renewed interest from homebuyers who were fence sitting
for over a year since September, but rains have now affected it. "Home buyers are
postponing their decisions until the rain and flood situation subsides," said Sanjay
Chugh, national mandated sales head and Chennai business head of JLL Residential.
Chennai has been pounded by relentless north-east monsoon rains in the past few
weeks, which has severely damaged the city's infrastructure, including roads and
electricity lines. The Tamil Nadu government has estimated losses at nearly Rs 8,481
crore. Several have died. Developers have stopped construction work for around 2-3
weeks now and many of them will also have to work on base structures and
foundations because of waterlogging.
"The losses are huge but people will have to cope with it. It will lead to lot of stress
and will take time to come back," said Irfan Razack, chairman of Confederation of
Real Estate Developers Associations of India (CREDAI), which has around 500
registered builders in Chennai alone. Some of the large national builders that have
significant presence in Chennai include Prestige Group, Tata Housing, Shriram
Properties, Godrej Properties and Sare Homes. An average of 5,000 homes were being
sold in Chennai every quarter in 2015 before the rains. According to realty research
firm Liases Foras, residential sales in Chennai jumped 90%, highest across India, in
the second quarter of the financial year at 7.4 million sqft.

Experts attributed the improved buying sentiment to reduced new launches, interest
rate reduction and rational pricing, coupled with attractive offers from developers. But
now, developers that had lined up offers in anticipation of a healthy sales cycle say
waterlogging and inundation of many localities such as Tambaram, Urapakkam,
Mudichur, Perumbakkam, Saidapet, Siruseri, Keelakatalai, Pallaikarana and
Velacherry have impacted demand.

Two large under-construction projects of Sare Homes are impacted. "At the moment
we can see that water has entered the lift wells in the completed parts of the projects
and could have damaged the machinery. Construction material has also been impacted
and so have the water and sewage treatment plants," said Vineet Relia, managing
director at the Gurgaon-based firm. "Some of our engineers and staff were stuck in the
city but a few of them have managed to move to Bengaluru," he added. Murali M,
managing director at Shriram Properties, said projects are expected to get delayed by
6-12 months.

"There is huge losses of building materials, it will take over a year for builders to
come out of financial damages," he said. Shriram is developing one million sqft of
commercial projects and 5.5 million sqft of residential projects in the city.
REVIEW Of LITERATURE

The purposes of this chapter are to clarify the research problem through a literature
review, to broaden the knowledge base of this research area, to develop a model for
examining the research problem and to present a justification for this research. The
chapter is divided into seven sections

Parent theory: consumer behaviour and the

purchase decision-making process

This section explains consumer behaviour and the purchase decision-making

process in general. Since residential house purchase choices are influenced by
consumer behaviour, the definition of consumer behaviour is discussed, followed
by a review of models of consumer behaviour. Then, the purchase decision-
making process is presented. The section ends by detailing the major factors
influencing consumer purchase decisions. The structure of this parent theory is
presented in

Outline of parent theory: consumer behaviour and purchase

decision-making

Parent Theory:
Consumer behaviour
and purchase
decision-making

Major factors
Definition of Models of Purchase
influencing consumer
Consumer behaviour Consumer behaviour decision-making
purchase behaviour
Definition of consumer behaviour

The ability of a marketing manager to implement successful marketing strategies,

both domestically and globally, is always based on a thorough understanding of how
and why consumers decide whether to select and purchase particular products and
services, and what factors determine whether they are satisfied with those products
and services (Quester et al., 2011). This applies to all types of enterprises, non-profit
organisations and government agencies involved in regulating marketing activities.

The study of consumer behaviour is an unusually diverse discipline, and it has been
defined in a variety of ways in the marketing literature. Simply put, consumer
behaviours are “activities people undertake when obtaining, consuming and disposing
of products and services” (Blackwell, Miniard, & Engel, 2006, p. 4). Consumer
behaviour has also been defined as the study of how individuals, groups and
organisations select, buy, use and dispose of goods, services, ideas or experiences to
satisfy their needs and wants (Kotler & Keller, 2009, p. 150; Solomon, 2009, p. 7).
An alternative definition is: “consumer behaviour in seeking, purchasing, using,
evaluating and disposing of products and services that they expect to satisfy their
personal needs” (Schiffman, Hansen, & Kanuk, 2012, p. 5). A more broad and
complete definition is: consumer behaviour is “the totality of consumers’ decisions
with respect to the acquisition, consumption, and disposal of goods, services,
activities, experiences, people, and ideas by human decision-making units over time”
(Hoyer & Macinnis, 2010, p. 3). Table 2.1 (see next page) presents a summary of
previous researchers’ consumer behaviour definitions. In this research, consumer
behaviour is defined as the study of how individuals, groups, and organisations select,
buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs
and desires. A full understanding of decision-making processes helps marketers to
identify consumers’ wants and needs and helps them to develop successful market
strategies.
Definitions of consumer behaviour

Definitions Sources

1. Activities people undertake when obtaining,

Blackwell, Miniard & Engel (2006, p. 4)
consuming and disposing of products and services

2. The study of how individuals groups, and

organisations select, buy, use, and dispose of

Kotler & Kelle (2008, p. 150); Solomon (2008, p.7)
goods, services, ideas, or experiences to satisfy their

needs and want.

3. Consumers’ behaviour in seeking, purchasing,

using, evaluating and disposing of products and

Schiffman & Hansen (2012, p.5)
services that they expect to satisfy their personal

needs.

4. Consumer behaviour reflects the totally of

consumers’ decisions with respect to the

acquisition, consumption, and disposal of goods, Hoyer & Macinnis (2010, p. 3)

services, activities, experiences, people, and ideas

by human decision-making units over time.

Some past studies have discussed home buyers’ purchase choices and have identified
that home buyers should be referred to as consumers in several consumption activities
such as choosing, buying and using housing products (Fierro et al., 2009; Huang & Yi,
2010; Opoku & Abdul-Muhmin, 2010). This study investigates purchase decision-
making and post-purchase satisfaction, and the researcher also identifies home buyers
as consumers.

Behaviour always occurs for the individual, in the context of groups and organisations.
Consumer behaviour involves the use and disposal of products as well as their
purchase; it involves services and ideas as well as tangible products (Schiffman et al.,
2012). Successful marketing managers are fully aware that consumer behaviour
should be the primary focus of every aspect of the company’s marketing program.

Marketing researchers’ efforts always focus on consumers’ consumption of goods,

services, time and ideas (Hoyer & Macinnis, 2010). The findings of research into
consumers’ purchasing decisions always respond to questions regarding what
consumers buy, where, when, why and how they buy, and how much they buy (Kotler
& Armstrong, 2009).

The next section presents the consumer behaviour model used in this research.

Model of consumer behaviour

Models of consumer behaviour are used to expound on the reasons a consumer

decides to buy a particular good or service (Quester et al., 2011). In general, a
consumer behaviour model is a view of how and why consumers have specific
behaviour patterns. A universally recognised consumer behaviour model is the
stimulus–response model shown in Figure 2.3 (see next page). Marketing and other
stimuli enter the consumer’s consciousness, and through a series of psychological
processes they combine with certain consumer characteristics, resulting in decision-
making processes and purchase decisions (Kotler & Keller, 2009).

The stimulus–response model has become a universal consumer behaviour model for
marketing managers. This model helps marketers to understand what happens in the
consumer’s consciousness between the arrival of the outside marketing stimuli and
their final purchase decision. The four key consumer psychological processes
(motivation, perception, learning, and memory) and consumers’ three types of
characteristics (cultural characteristics, social characteristics and personal
characteristics) fundamentally influence consumer response (Kotler & Keller, 2009).
The model of consumer behaviour

Consumer
Psychology
Buying Decision Purchase
Motivation
Process Decision
Marketing Perception
Other Stimuli
Stimuli
Learning
Problem recognition Product choice
Products & services Economic
Memory
Information Search Brand choice
Price Technological
Evaluation of Dealer choice
Distribution Political alternatives
Consumer
Purchase amount
Communications Cultural Characteristics Purchase decision
Purchase timing
Cultural Post-purchase
behaviour Payment method
Social

personal

Source: Adapted from Kotler and Keller 2009, p. 162

The five stages of the Buying Decision Process Model are: problem recognition,
searching for information, evaluating of alternatives, purchase decision, and post-
purchase behaviour (Blackwell, Souza, Taghian, Miniard, & Engel, 2006; Quester et
al., 2011; Schiffman et al., 2012; Solomon, 2009). In some theories, this decision-
making process is divided into two sections: the pre-purchase process and the post-
purchase decision-making process. The pre-purchase process comprises the stages
before consumers purchase products or services. It includes the following three
stages: problem recognition, searching for information, and evaluation of alternatives.
Post-purchase behaviour involves all the consumer’s activities and the experiences
that follow the purchase. These activities include post-purchase actions, post-purchase
satisfaction, post-purchase use and disposal of the products or services (Kotler &
Keller, 2009). The following sections explain each of the five stages of the purchase
decision-making process in detail.
Purchase decision-making process

Traditionally, consumer researchers have approached decision-making processes from

a rational perspective. The consumer decision-making process is defined as a series of
interrelated activities that lead to a choice between alternatives. Smart marketing
managers seek to fully understand the consumers’ decision-making process which
involves consumers’ experiences in studying, selecting, using, and even disposing of
products or services (Kotler & Keller, 2009). In the literature, marketing scholars
developed a ‘five stage model’ for the consumer purchase decision-making process as
shown in Figure 2.4. In theory, all of the following five stages will be experienced by
consumers in a purchase decision-making process: problem recognition, searching for
information, evaluation of alternatives, purchase decision, and post-purchase
behaviour. However, in some actual buying processes, consumers often do not pass
through all of these five stages. Consumer may skip or reverse some stages
(Blackwell, Miniard, & Engel, 2006; Kotler & Armstrong, 2009; Quester et al., 2011).
This thesis focuses on parts of the five-stage model to test the research hypotheses.

Five-stage purchase decision-making process

Post-
Problem Information Evaluation of Purchase
purchase
recognition search alternatives decision
behaviour

Source: Adapted from Hawkins, et al. 2011; Kotler & Keller 2009
Purchase decisions

In the evaluation stage, consumers form preferences from among the products in the
choice set. They may also form an intention to buy the most preferred product (Kotler
& Keller, 2009). A great deal of research, and the experiences of successful
marketers, provide clues to understanding how consumers decide to buy and where to
buy products. The purchase decision-making process and indicates how consumers
decide whether and where to buy a product.

In reality, retail choice is often an interactive process in which type of outlet and
specific retailers affect each other. The process of selecting a specific product
involves matching consumer characteristics and purchase characteristics with retailer
characteristics. Individuals may adapt different criteria to evaluate which product can
best meet their need based on the type of purchase and how consumers anticipate each
will perform according to the various criteria (Blackwell, Souza, et al., 2006)

Consumers don’t always go through all the steps involved from the retail concept to
competitive retailers to specific shop choice; their past experiences and their preferred
brand sometimes enable consumers to make a choice immediately (Blackwell, Souza,
et al., 2006). In addition, consumers in different market segments might make
different purchase decisions based on their perceptions of the attributes they consider
important (Kotler & Armstrong, 2009).
Purchase decisions

Individual characteristics Purchase characteristics

Lifestyles Type of product
Economic variables Timing variables
Views of shopping situation Price/quality situation

Evaluating types of retailer

Evaluative criteria
Location

Nature and quality of Evaluating retail competitors

assortment

Price
Advertising and promotion
Store choice
Sales personnel
Services
Customer characteristics

Store atmosphere Purchase

Post-transaction service and
satisfaction

Outcome
Major factors influencing consumer purchase
decision-making

According to Kotler and Keller’s (2009) consumer behaviour model, four

psychological processes, motivation, perception, learning and memory, fundamentally
influence consumer response, and consumer characteristics which include cultural
factors, social factors and personal factors influence consumer purchase behaviour. A
more detailed summary based on the work of Blackwell et al. (2006) and Quester,
Pettigrew and Hawkins (2011) demonstrates that factors affecting consumer purchase
decision processes include individual differences and environmental influences.
Figure 2.11 (see next page) below presents the major factors influencing consumer
purchase behaviour.

All of the individual and environmental factors exert impacts on all five stages of
the consumer purchase decision-making process: problem recognition, searching
for information, evaluation of alternatives, purchase decision and post-purchase
behaviour. The individual factors which have an impact on consumer purchase
behaviour include consumer demographics, personality and lifestyle, motivation,
knowledge, and attitudes. Culture, social class, family and household, group and
personal factors are environmental variables which influence consumer purchase
behaviour. Each of these factors is explained in the following sections.
Factors influencing on consumer purchase behavior

Individual Differences
Marketing Stimuli
Demographics
Products & services Personality and lifestyle
Motivation
Price Knowledge
Buying Decision Process
Intention, attitudes,
Distribution beliefs and feelings
Problem recognition
Communications
Information Search

Other Stimuli Evaluation of alternatives

Economic Purchase decision

Environmental
Technological influences Post-purchase behaviour

Culture, ethnicity, and

Political
social class
Family and household
Cultural
Group and personal

Source: Adapted from Blackwell et al. (2006) and Kotler & Keller (2008)

Individual Influence

Individual factors – also called internal factors, are the consumers’ psychological
processes that affect consumer behaviour in acquiring, obtaining, consuming and
disposing of products and services. Individual influences include consumer
demographics, personality, lifestyle, motivation, knowledge, intention, attitudes,
beliefs and feelings (Blackwell, Miniard, et al., 2006; Schiffman et al., 2012). Details of
each factor are examined below.
1) Demographics

A series of important determinants of consumers’ demand for products or services are

consumers’ personal characteristics, which include their demographic particulars,
lifestyles and personalities (Blackwell, Souza, et al., 2006).

“Demographics is interested in any population characteristic that might be useful in

understanding what people think, what they are willing to buy, and how many fit this
profile” (Zikmund & Babin, 2009). Demographic variables are easier to measure than
other variables in a research paper and consumers’ demands closely reflect
demographic variables. Demographic variables include age, gender, education,
income, occupation, family structure, social class and religion. The concept of market
segment always aims to adjust for differences in consumers’ needs and adjusts
products to meet and satisfy different groups of consumers (Hoyer & Macinnis, 2010).
With regard to consumer purchase behaviour, some researchers examine a range of
demographic characteristics that may be associated with needs and wants of
consumers in segment markets.

2) Personality and lifestyle

Personality in consumer studies, context is defined as an individual’s unique,

consistent responses to environmental stimuli. An individual’s psychological
character can influence their responses to the environment. Personal traits can be used
by marketers to analyse consumer purchase choice processes because personal traits
are common to many individuals and vary in absolute amounts among individuals
(Kotler & Keller, 2009).
Personal values indicate what are important in an individual’s life. These values can
reflect the consumer’s purchase choice bias, which is influenced by the various social
values to which that individual is exposed. Personal values influence the individual’s
need recognition stage, and also affect consumers’ evaluative criteria (Blackwell,

Souza, et al., 2006). In the housing decision-making process, home buyers’ personal
values influence the attribute selection criteria (Greene, Margarita, & Ortuzar, Juan
De Dios, 2002).

A lifestyle is a pattern of an individual living in the world, including how the

individual expends time and money in social activities, and expresses their interests
and opinions (East et al., 2008). Individuals use their personal lifestyles to interpret
the events happening around them, and to interpret, conceptualise and predict events.

A consumer’s purchase decision processes generally fit with their lifestyle and are
appropriate for the price level the consumer can afford (Kotler & Armstrong, 2009).

3) Motivation

Motivation concerns why an individual does what he or she does. A consumer’s

motivation begins when a need is aroused, and then the motivated consumer is ready
and willing to engage in the purchase process and they attempt to satisfy their
physiological and psychological needs (Hawkins et al., 2011). The different needs of
different consumers lead them to look for different products or services. Different
consumer motivations attach to a variety of needs and affect how consumers evaluate
and select products or services. Marketers try to understand consumers’ motivations to
appreciate their demand characteristics (Hawkins et al., 2011).

4) Knowledge

Knowledge is the information stored in a consumer’s memory which is used to guide

consumers to evaluate and select products or services (Schiffman et al., 2012).
Consumer knowledge includes a wide range of information sources in the consumer’s
memory, such as product attributes and associations, various pieces of information
related to the consumer’s buying process (when, where to buy), how products or
services can be consumed and used, and so on.

5) Intention, attitudes, beliefs and feelings

In consumer psychology there are always some internal relationships between these
four psychological factors. Before a consumer forms an intention to purchase a
product or service, their first step is to judge the strength of their beliefs about the
item. The consumer then forms an attitude towards the product or service, and lastly,
makes a purchase decision about it. After making the payment, he/she will undergo
the consumption experience. These four psychological factors influence consumers’
decision-making processes (Blackwell, Souza, et al., 2006).

Thus, consumer demographics, personality, lifestyle, motivation, knowledge,

intention, attitudes, beliefs and feelings, are all individual factors which exert an
impact on consumers’ purchase behaviours. The next section discusses environmental
variables influencing the consumer buying process.

Environmental influences

Environmental factors consist of culture, ethnicity, social class, family, household,

group and personal influences.
1) Culture, ethnicity, and social class,
Culture

Culture represents influences that are imposed on the consumer by other individuals.
Culture is everything the individual learns and shares with other members in a
society, and it is a complex whole that includes knowledge, ideas, normalcy, values,
beliefs, arts, and any other capabilities and behaviours acquired by a person as a
member of a society (Lantos, 2011). Culture affects all five stages of the purchase
process (need recognition, search, alternative evaluation, purchase decision and post-
purchase behaviour) in various ways.
Ethnic micro-cultures

People define themselves and others by using ethnic labels. In a consumer context,
ethnicity is best defined as some combination of the strength and weakness of the
affiliations that people have with an ethnic group. People who belong to the same
ethnic group share common knowledge and culture, and they may have similar
personal perceptions. People living in different ethnic groups always have different
cultural backgrounds and lifestyles, which may lead them have different consumer
behaviours (Blackwell, Souza, et al., 2006).

Social class

Social classes are relatively permanent and homogeneous divisions in a society, with
members (including individuals or families) of a class sharing similar economic
positions, wealth, status, values, lifestyles, interests, education and behaviour.
Occupation, personal performance, personal interactions, possessions, value
orientation, and class consciousness determine an individual’s social class. Education,
occupational prestige and income are the main achievement-based status dimensions
that determine an individual’s social standing. The distinctions between social classes
cause differences in patterns of consumption behaviour, and have a noticeable impact
on the ‘evaluation of alternatives’ stage of consumer purchase decision-making
(Quester et al., 2011; Solomon, 2009).

2) Family and household influences

The family or household is the basic consumption unit for many consumer products or
services, and consumer purchase decisions are significantly influenced by the roles of
various family members in the purchase and consumption of products. These
decisions also affect other family members (Blackwell, Souza, et al., 2006). Some
demographic dimensions of a population relate to family and household structure such
as age, the head of households, marital status, employment situation, number of
children and family size. These dimensions affect families’ and households’ purchase
decisions. Individual family members play different roles and have different amounts
of influence on each stage of purchase decision-making processes (Solomon, 2009).
Product category is closely related to the identity of the user of the product and
sometimes product category is an indicator of the type of decision-making that takes
place in the household (husband-dominant decision-making, wife-dominant decision-
making, or autonomic decision-making) (Pride & Ferrell 2011, pp. 135; Hoyer &
Macinnis 2010, pp. 351). Negotiation or compromise always help family members to
solve purchase conflicts.

3) Group and personal influence

Group influence

A reference group is any group of people with whom individuals compare themselves
for guidance in developing their own values, attitudes, knowledge and behaviour
(Hoyer & Macinnis 2010, pp. 392). Kolter and Keller (2008) classify reference groups
into primary groups and secondary groups. Primary groups are those with whom the
person interacts fairly continuously and informally. They include family, friends,
neighbours, and co-workers. Secondary groups are people with religious, professional,
and trade-union associations. They tend to be more formal but less comprehensive and
less influential in shaping thought and behaviour.

Reference groups create individuals’ socialisation and force individuals recognise

what behaviour is more likely to result in stability for the whole social group.
Reference groups are also important in helping individuals to protect and modify their
self-concept in their interactions. Lastly, reference groups influence individuals to
comply with norms in a society (Blackwell, Miniard, et al., 2006).

Personal influence

Individuals belong to several groups and they are expected to adapt the group’s values,
beliefs, and norms. This leads consumers to behave in predetermined ways. According
to Blackwell et al. (2006), word-of-mouth communication (the informal transmissions
of ideas, comments, opinions, and information between two people) and the opinions
of leaders are the two main personal factors which have a significant influence on
individuals’ behaviour.

Definition of housing market

Jones and Watkins (2009) state that the general housing market can be defined as
trade between housing buyers and sellers, either direct sales by owners or indirect
sales through brokers. Companies that are engaged in housing ownership,
management and/or development have generated huge revenues. The concept of the
housing market as defined by Priemus (1984) is widely adopted by scholars.
According to Priemus (1984) the housing market has three parts: the dwellings
trading market, the rental housing market and the housing services provided by rental
housing suppliers.
The composition of the housing market

dwellings trading market

Housing services
Housing Market
provided by suppliers

Rented housing market

Source: Adapted from Priemus, 1984

This thesis aims to investigate the residential housing market in China, which
comprises the housing trading market and the services provided by rental housing
suppliers in the housing trading market.
Development of the global real estate market

The housing market is a part of real estate market, and is significantly influenced by
the whole real estate market. An understanding of the real estate market helps us to
understand the housing market more thoroughly.

The real estate market is defined as: “the interaction of individuals who exchange real
property rights for other assets, such as money” (Kahr & Thomsett, 2005, p. 217).

And specific real estate markets can be defined on “the basis of property type,
location, income-producing potential, typical investor characteristics, typical tenant
characteristics, or other attributes recognized by those participating in the exchange of
real property” ( Kahr & Thomsett, 2005, p. 217). The real estate industry worldwide
continued to grow in the five-year period from 2004 to 2008, and generated a total
capitalisation of US$501.60 billion. The American and European industry groups
reached values of US$175.80 billion and US$180.40 billion respectively in 2008. The
residential sector was the industry's most lucrative in 2008, generating total revenues
of US$287.10 billion, equivalent to 57.20 per cent of overall value (Datamonitor,
2010). However, after this prosperous period America’s housing bubble burst at the
end of 2008. Any collapse of America’s housing market has a direct negative impact
not only on home valuations, but on the nation's mortgage markets, residential house
builders, employment rate, and home supply retail outlets. The decline in the US
housing market also had a significant negative influence on the worldwide housing
market, especially the European housing market (Byun, 2010; Hendershott,
Hendershott, & Shilling, 2009; Martin, 2011).

The real estate industry attracts a wide range of investors including domestic, foreign
institutional and individual investors (Eldred, 2009). The real estate industry was once
dominated by local entrepreneurs but in the past two decades, commercial real estate
has become an increasingly global business as investors search across national
borders for enhanced returns and diversification (Murray & Brown, 2006). In the
period from 2002 to 2006, cross-border investments tripled to US$116 billion at the
end of 2006, and the cross-border investment amounts reached 20 per cent of all
property investment worldwide (Hobbs, Chin, Tpointzi, & Keng, 2007). At the end of
2006, the global real estate investment market was dominated by the North American
real estate market, which remained the largest real estate investment destination, with
investment of US$216 billion in 2006, nearly half of total global transaction volumes.
The Asia-Pacific was the fastest-growing market area, with investment growing 46
per cent to US$68 billion in 2006 (Murray & Brown, 2006). Worldwide, investors
faced property decline risks which started at the end of 2008. As a result, the total
global real estate investment fell to its lowest point 2009, and amounted to US$209
billion in that year. However, according to a report by Jones Lang Lasalle (2011) and
statistical data from Datamonitor (2011), the worldwide total investment in the real
estate industry recovered in 2010, with an average increase rate of 35% in 2010 and
2011. The market was worth approximately US$316 billion in 2010 and US$379
billion in 2011.
Scope of The Study

This study throws light on the service quality and the factors that
affects the buying decision of residential apartments in the largest cities
Chennai in Tamil Nadu. An attempt has been made in this research the
various factors affects the purchase decision of the residential flat in the
selected city and perceived value of the customers about the service
quality of the residential flat promoters. This study will be helpful to draw
up a further policy for improving customer satisfaction in residential flat
and increase performance of the real estate promoters and will act as a
secondary data for further research.
Attributes influencing home buyers purchase decisions

Name (Optional) : ……………………

What is your gender?

a) Male b)Female

What is your age?

a) 25-35 b) 36-45 c) 46-55

d) above 56

What is your marital status?

a) Single b) Married c) Others……… (Please specify)

Educational Qualification?

a)High school b)Bachelor Degree c)Master Degree d)others

………………..

Your Occupation?
a) Government employee b) Private employee c)Business owner d)Others
…………….

Income per year?

a) Below 50,000 b) 51,000-1,50,000

c) 1,51,000-2,51,000 d) above 2,51,000

How many children do you have?

a) 1 b) 2 c) 3 d) Others ……………..
Family Size

a) 2 b) 3 c) 4 d) Others
………………...

1.Dwelling type (Apartment, Duplex and Villa) is important when you purchase

a) b)

c) c)

2. Age of the house is important when you purchase

a) b)

c) c)

3. Layout & Decorate style of the house is important when you purchase

a) b)

c) c)

4. Architectural Materials is also an important attribute when choosing a house.

a) b)

c) c)

5. Housing price is important when you purchase

a) b)

c) c)

6. Exterior spaces refer to public area, such as the public aisle, elevator, recreation room
is important when you purchase

a) b)

c) c)
7. Air quality of the living area is considered as an important attribute when making a
purchase decision

A) b)

c) c)

8. Width of road and passages is considered when making a purchase decision

a) b)

c) c)

9. Rain water drainage system is considered when making a purchase decision.

a) b)

c) c)

10. Location close to schools and nurseries is important for home buyers when making a
purchase decision.

a) b)

c) c)

11. Location close to health centre and hospital is important for home buyers when
making a purchase decision.

a) b)

c) c)

12. Location close to shopping centre is important when you purchase.

a) b)

c) c)

13. Location on a main street is important when you purchase.

a) b)

c) c)

14. Location close to workplace is important when you purchase.

a) b)
 c) c)

15. Providing service as promised is important when you purchase.

a) b)

c) c)

16. Dependability in handing home buyers’ service problems is important when you
purchase.

a) b)

c) c)

17. Readiness to respond to home buyers’ requests is important when you purchase.

a) b)

c) c)

18. Secure housing transaction is important to home buyers is important when you
purchase.

a) b)

c) c)

19. Employees who are consistently courteous is important when you purchase.

a) b)

c) c)

20. Employees having the home buyers’ best interests at heart is important when you
purchase.

a) b)

c) d)

21. Employees who understand the needs of their home buyers is important when you
purchase .

a) b)

c) c)

22. Convenience of service office hours is important when you purchase.

a) b)
 c) c)

23. Employees who have a neat, professional appearance is important when you
purchase.

a) b)

c) c)

24. Availability of after sales service is important when you purchase.

a) b)

c) c)