Revised research22

Marawoy-Balete Road, Balintawak, Lipa City 4217Telephone Numbers: +63 43 7575277 | 706 0041

Website: www.ub.edu.ph

CHAPTER I

The Problem and Its Background

Introduction

The main purpose of this study is to identify what factors have impact on

house purchase decision of customers and examine how these factors influence

their decision of real properties in Lipa City.

This study stemmed its importance in determining the effect of certain

differences in the purchasing of real property and how it will affect the buying

behavior of every real estate owner. The study defined the process of assessing

the influencing factors of acquisition of real property. The researchers also

focused in identifying the demographic forces that may influence the purchasing

of the real property.

Customers have the wide choice to select the best suitable properties for

them because of the intense competition and additional supply in the market.

Therefore, it is important for the real estate marketers to understand the

behavior of prospective buyers and to identify the influencing factors, which

affect the choice of customers. Therefore, in this background the present study

aimed to identify the key factors affecting the decision of customers to buy

residential properties in outskirts of City of Lipa.

1



Statement of the Problem

The purpose of this study is to identify the factors that may affect the

purchasing of the real property in Lipa City. Specifically, this study seeks to

answer the following questions:

a. What are the factors that influence buying behavior of a person

towards real estate?

b. What are the most influencing factors that affect buying the real

estate?

c. What are the differences between the influencing factors and

consumer’s demographic factors?

d. Which factor is relatively more important in a buying decision of a

house?

2



Research Paradigm

3



Conceptual Framework

4



Significance of the Study

This study provided information that will benefit the different areas of

society. The study will help the several people to be informed of the buying

preferences in real properties in the Lipa City.

The knowledge of different factors affecting the buying behavior and

buying preferences of the consumers will provide to builders and developers to

launch their residential properties schemes and to understand the insight of

buying behavior. Hence, they will be able to launch their housing schemes

better and effectively.

To the Buyers and Sellers would also benefit directly. They would be able

to make informed choices in the real estate property investment. They would

know what factors to consider and the weight of each in their choices of where

to invest, when to invest and how much to invest.

To the Students, this study will help them how to be a professional like an

accountant through different considerations in buying behaviour of a person.

To the future researchers, this study will serve as a stepping stone and

guide to them in conducting another further research study for its development.

5



Scope and Limitation of the Study

This study focused only on identifying the factors that may affect certain

differences in purchasing of real estate. Furthermore, the study was held only in

the areas covered by Lipa City. Selected areas in the city are considered by the

researcher.The study is confined to the consumer’s point of views, attitudes,

values etc; rather than those of sellers.

Thus, it was limited only to the information that was cited and reviewed.

The collection of data through direct, indirect, registration and observation was

included in this study.

6



Definition of Terms

Market Value – is the price agreed upon by the buyer and seller in the open

market in the usual and ordinary course of legal trade and competition; the price

and value of the article established or shown by sale, public or private

Mass Appraisal – is the process of valuing a group of properties as of a given

date using standard methodology, employing common data, and allowing for

statistical testing;

Real Estate – the physical land and all those items, which are attached to the

land. It is the physical, tangible entity which can be seen and touched, together

with all the additions on, above, or below the ground;

Real Property – includes all the rights, interests, and benefits related to the

ownership of real estate. Ownership of real estate is evidenced by a Certificate

of Title, Free Patent or Tax Declaration in the absence of Certificate of Title;

Intention - is an indication of a person's willingness to perform the behavior,

and it is an immediate antecedent of behavior.

Demographic- characteristics consist of the individuals in term of “gender, age,

educational status, marital status, career, the quantity of family members and

children, as well as the residence property.

7



Research Hypotheses

Based on the researcher's perception, the following hypotheses had been

developed in their null form.

There is no significant influence between demographic profile of the

respondent and the intention in buying new properties.

There is no significant influence between influencing factors that may

affect the intention of acquiring a real estate.

8



CHAPTER 2

Review of Related Literature

Beamish et.al (2006) explored influences on housing choice and

proposed a conceptual framework that examined the influence of lifestyle as an

intervening factor in housing choice. Influences on housing choice included age,

family type, and family size, stage in the life cycle, social class, income,

occupation, education and value.

Zhaohui (2006) from the perspective of the consumer residential real

estate market, investigated the basic characteristics of the homebuyers,

homebuyers purchasing preferences and influencing factors.

Leishman et al. (2006) gave a detailed examination of new-built housing

buyers‘housing needs and preference and analyzed on the basis of the physical,

location and quality characteristics of housing actually constructed by house

builders. Study, further, examined the relative importance of physical property,

locational, neighborhood and price factors to consumers in the housing choice

process.

Shi Lin (2005) determined the housing preferences and priorities among

residents in different socio demographic and socioeconomic groups in

9



Stellenbosch and explored a functional formula by which the price of housing in

Stellenbosch could be predicted. As per the findings of the study, dwelling

related attributes were found to be more important than neighboring and

location-related attributes.

Gupta et al. (2006) captured the impact of environmental, structural and

location variables on housing prices prevailing in the city and found proximity to

water body‘ fetches the highest 18.9 per cent of the total value in Navi Mumbai,

and garden proximity fetches the highest 13.2 per cent in Central suburb. The

capitalization of land was also observed proximate to water and greenery.

Ariyawansa (2007) in his study aimed to provide a scientific insight into

the consumer behavior of housing market in Sri Lanka. It was found that

consumer preference mainly depends upon the housing transaction,

appreciation in the future, complementary products and services like water and

electricity supply.

Litman (2011) investigated consumer housing location preferences and

their relationship to smart growth. It examined claims that most households

prefer sprawl-location housing and so was harmed by smart growth policies.

This analysis indicated that smart growth tends to benefit consumers in

numerous ways.

10



Choguill (2008) defined neighborhood as a space in which residents live

together for a common interest. As stated by Tan (2011a), a home that is

situated in a good neighborhood would be preferable as households are willing

to pay more for the house with good indoor and outdoor environmental qualities.

Studies by Chapman and Lombard (2006) and Tan (2011a) stated that

neighborhood environment, such as cleanliness, pollution and crime are

important factors before deciding on the purchase of a property.

Customer behavior is an important research topic for recent decades.

“There is also a clear shift from rational factors to psychological factors and to

social decision factors” (Bargh, 2006). Besides, there is a link between the

“intention to purchase” to “decision to purchase” of customers, especially the

decision related to purchase real estate (Ajzen, 2006, p. 179; Han & Kim, 2010,

p. 659; Kunshapn & Yiman, 2011,p.7579).

“Demographic” characteristics of customers are internal factors related to

decision making (Mateja & Irena, 2009). “Demographic” characteristics consist

of the individuals in term of “gender, age, educational status, marital status,

career, the quantity of family members and children, as well as the residence

property”.

“Demographic” characteristics consist of age (Yalch & Spangenberg,

2006), education (Gattiker et al., 2006), income level (Dawson et al., 2006),

11



gender (Zhang et al., 2007) which are factors influenced on the “purchase

intention” of customer.

Particularly, “gender” has significantly influence on the financial feature of

(Sengul et al., 2010, p.214). It is also confirmed that there is a significant

difference in real estate buying decisions to “age” and “gender”, and not to

“educational levels” and “marital status” (Haddad et al., 2011). Correspondingly,

in this study, “gender” and “age” characteristics are considered as control

variables so that investigate whether effect of those demography variables on

housing purchase decision making of customers or not.

The review of literature revealed that in other countries, there is dearth of

studies on understanding the consumer behavior towards buying of residential

properties. Moreover, no such study has been conducted to study the

purchasing behavior on real estate in Lipa City and surrounding areas.

Therefore, the present study will contribute to the domain of existing knowledge

too.

12



Chapter 3

Research Methodology

This chapter presents the research design of the study, the research

participants, the data - gathering instruments, the data gathering procedure

observed, and the statistical treatment of responses.

Research Design

The study used a descriptive method of research as it came up with the

factors that can influence buying preferences of real estate property. The data

that was collected was categorized into the various classes since the study

aimed at providing a picture of the relationship between the demographic profile

of the respondent and the influencing factors that may affect their intention in

acquiring new properties.

13



Research Participants

Real estate owners from selected subdivisions in Lipa City constituted the

study population, while a sample consisting of 150 real estate owners was

selected. The number of sample size was based from computed value using the

Slovin’s formula. And from the total of 4092 registered home owners in the city,

the researchers came up with total 150 of respondents with an 8% marginal

percent of error.

Research Instrument

The data for this study was gathered from the responses to the

questionnaire. It was utilized in order to obtain information from the respondent.

The questions were both closed and open ended and covered the independent

variables that were used to obtain responses. Issues covered were sequenced

and worded the data collected systematically.

The type of questionnaire that used in this study is at the checklist format.

The checklist format is having options but only one answer is needed. The

respondents made a check mark on the space provided that corresponds to

their best choice. The researcher sought a permission from the administration of

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the target respondent to visit and supply questionnaires to real estate property

owners.

Data Gathering Procedure

In collaboration of the researcher's ideas they came up with the study

concerning the factors that may influence the purchasing of real property. The

researchers with the helped of their adviser made the statement of the problem

that is associated to the title. The title has gone through revision for it to suit

better for the study. The researchers were undergone through extensive

research to gather data and information to support the study. Many related

articles and studies, both foreign and local are also collected to further support

the study.

A survey questionnaire was used to test the hypotheses proposed in this

study. Subjects were presented with a participation information sheet briefly

describing the nature of the study, and were also be collected.

15



Statistical Treatment of Data

The researchers used statistical method to show the data that gathered

to the survey made by the researchers.

This involved interpreting information collected from respondents when

the questionnaires were completed by the respondents. The researcher

compiled them by use of data editing, data coding and data tabulation.

The collected data was analyzed with the helped of SPSS version 22. Chi

Square Analysis was used to test the relationship between the demographic

profile and their intention in acquiring new properties. Non parametric test like

Chi Square Goodness of Fit were also used to see the proportion between

respondents and influencing factors that can be a significant in the buying

preferences of the respondents.

16



Chapter 4

Results and Discussions

This chapter presents the data gathered in the study which were

analyzed using the appropriate statistical tools.

I. Demographic Profile

Table 1Frequency Distribution By Gender

Gender Frequency Percent

Valid

Male 74 49.3

Female 76 50.7

Total 150 100.0

The table shows that the number of respondents was composed of

50.7% of female which was counted as 76 out of 150 respondents. As

compared to 74 males which represents the 49.3% of the total sample

population.

17



Table 2Frequency Distribution By Age Group

Age Group Frequency Percent

Valid

25-34 33 22.034-44 49 32.745-54 45 30.055-64 23 15.3Total 150 100.0

The table shows that the group of the respondent was consisted of 32.7%

in the age of 34 to 44, followed by 30% which belonged to the age of 45-54. The

age group belonging to 55 to 64 was relatively small which represents the

15.3% of the sample population.

Table 3Frequency Distribution By Levels of Education

Levels of education Frequency Percent

Valid

Less Than Highschool 12 8.0Highschool 27 18.0

Some College 38 25.32-Year College Degree 22 14.74-Year College Degree 21 14.0

Masters Degree 10 6.7Doctoral Degree 20 13.3

Total 150 100.0 The table shows that 25.3% was represented by the respondents who

taken up Some College, followed by 18% who graduated in High school. The 18



small population of respondent was represented by 6.7% who finished with

Masters Degree.

Table 4Frequency Distribution By Occupation

Occupation Frequency

Percent

Valid

Professional 81 54.0Businessman 36 24.0

Administration Executive 18 12.0Other 15 10.0Total 150 100.0

The table shows that 54% of the respondents are professional, followed

by 24% of the respondents were engaged in some business. The other

respondents of 10% involved at unspecified occupation.

Table 5Frequency Distribution By Annual Income

Annual Income Frequency Percent

Valid

10000-30000 6 4.030000-70000 34 22.770000-140000 51 34.0

140000-250000 41 27.3250000-500000 14 9.3500000&more 4 2.7

Total 150 100.0The table shows that 34% of the sample population has an income of

Php.70000 to Php.140000 annually. Further shows that 27.3% of the current

19



income of a respondent was earned at Php.140000 to Php.250000 annually.

The small earners annually were only at 4%.

II. Demographic Factors Data Analysis

Table 6Gender and the Intention in Acquiring a New Home

Are you currently looking to purchase a new home?Total

Cross Tabulation YES NO

GenderMale

Count 33 41 74% within gender 44.6% 55.4% 100.0%

FemaleCount 29 47 76

% within gender 38.2% 61.8% 100.0%

TotalCount 62 88 150

% within gender 41.3% 58.7% 100.0%X2=0.641 p=0.423 Verbal Interpretation= Not Significant

There is no significant relationship between gender and the intention in

looking a new home. Therefore, no intentions of respondents in looking a new

home will be affected in regards of their gender.

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Table 7Age Group and the Intention in Acquiring a New Home

Are you currently looking to purchase a new home?TotalCross Tabulation YES NO

Age Group

25-34Count 15 18 33

% within Age group 45.5% 54.5% 100.0%

34-44Count 28 21 49

% within Age group 57.1% 42.9% 100.0%

45-54Count 14 31 45

% within Age group 31.1% 68.9% 100.0%

55-64Count 5 18 23

% within Age group 21.7% 78.3% 100.0%


% within Agegroup 41.3% 58.7% 100.0%X2=10.862 p=0.012 Verbal Interpretation = Significant

There is a significant relationship between age and the intention in

looking a new home. The age group belonging to 34-44 is more likely to have an

intention in looking a new home. Out of total by 41.3% who answered Yes,

57.1% of them agreed that they have a clear intention in buying a new home.

And the age group belonging to 55-64 disagreed, because from the total of

58.7% who answered No, 78.3% of them was from their age group.

21



Table 8Levels of Education and the Intention in Acquiring a New Home

Are you currently looking to purchase a new home?TotalCross Tabulation YES NO

Levels of education

Less Than Highschool

Count 5 7 12% within level of

education41.7% 58.3% 100.0%

HighschoolCount 1 26 27

% within level of education

3.7% 96.3% 100.0%

Some CollegeCount 27 11 38


71.1% 28.9% 100.0%

2-Year College Degree


education86.4% 13.6% 100.0%

4-Year College Degree


education47.6% 52.4% 100.0%

Masters DegreeCount 0 10 10


0.0% 100.0% 100.0%

Doctoral DegreeCount 0 20 20


0.0% 100.0% 100.0%



41.3% 58.7% 100.0%X2=69.483 p=0.000 Verbal Interpretation = Significant

The person who finished some college is more likely to have an intention

in looking a new home. Because out of 41.3% who answered Yes, 71.1% of 22



them came from the respondents who belong to that group. And from the total of

58.7% who answered No, 100% of them belonging to the group who finished

masteral and doctoral degree disagreed.

Table 9Occupation and the Intention in Acquiring a New HomeAre you currently looking to purchase a new home?

TotalCross Tabulation YES NO

Occupation

ProfessionalCount 15 66 81

% within occupation 18.5% 81.5% 100.0%

BusinessmanCount 28 8 36


Administration ExecutiveCount 15 3 18


OtherCount 4 11 15




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X2=51.530 p=0.000 Verbal Interpretation = Significant

A businessman is more likely to have an intention in looking a new home.

Because out of 41.3% who answered Yes, 77.8% was came from that group.

The disagreement of 81.5% out of 58.7% who answered No came from

professionals signifies that they have no clear intention in acquiring a new

home.


There is a significant relationship between annual income and the

intention in looking a new home. The person with the annual income of 500000

24

Table 10Annual Income and the Intention in Acquiring a New HomeAre you currently looking to purchase a new home?

TotalCross Tabulation YES NO

Annual Income

10000-30000Count 0 6 6

% within annual income 0.0% 100.0% 100.0%

30000-70000Count 13 21 34


70000-140000Count 31 20 51


140000-250000Count 18 23 41


250000-500000Count 5 9 14


500000&moreCount 3 1 4






& more is more likely to have an intention in looking a new home. Because 75%

from 46.7% who answered No, respondents who earned from that group agreed

that they have a clear intention in purchasing a new home. The 100% of the

respondents who earned 10000-30000 disagreed that they will acquire new

home in the future, based on the 53.3% who answered NO.

III. Influencing Factors Data Analysis

Table 11Community Status

What were your main reasons for buying a home?Observed

NExpected

NResid

ualRelocated 25 30.0 -5.0

Change In Family Status

62 30.0 32.0

Desired Larger Home 12 30.0 -18.0Desired Better

Location19 30.0 -11.0

Tired Of Renting 32 30.0 2.0Total 150


The table above shows that there is a significant value that may influence

the buying behavior of a respondent. With p= 0.000, it clearly states that the

main reason why a person intend to buy a home is because of the change in

25



family

status. Out

of 150

respondents 62 of them answered for that reason.


26

Table 12Location

What are the main factors that lead you to buy a property?Observed

NExpected

NResidu

alGood Location 36 37.5 -1.5

Access To Transportation 29 37.5 -8.5Plenty Of Amenities 14 37.5 -23.5

Low Price Investment 71 37.5 33.5Total 150



The table shows that the main factors why a respondent intend to

purchase a real properties, is because they considered it as a low price

investment. The table above is a clear evident, because 71 respondents that

were observed answered it. And it is more than from the expected, with residual

value of 33.5. The test statistics also shows that above information has a

significant influence.

27

Table 13Living Arrangements

What was your living arrangement immediately before your recent home purchase?

Living Arrangements Observed N

Expected N

Residual

Lived With Parents 92 50.0 42.0Rented An Apartment

32 50.0 -18.0

Owned Previous Home

26 50.0 -24.0

Total 150




The table shows that the respondents living arrangements before made

them to decide to buy a new home. Therefore, the 92 respondents who

answered that they have been living with their parents before already bought a

home to have separate properties. The table further shows that the observed

count is significant, because of the p=0.000 which is less than α=0.05.

Table 14Intended Use of Property

What was the intended use of the property?Observed

NExpected

NResidu

alPrimary

Residence106 50.0 56.0

Second Home 15 50.0 -35.0Rental Property 29 50.0 -21.0

Total 150X2=96.040 p=0.000 Verbal Interpretation = Significant

28



The table shows that 106 of the respondent answered that the reason

why they acquired a property is because they intended to use it as a primary

residence. The 106 respondents answered it as observed from the table, and it

is more than from the expected count. In consideration with the test statistic, it

clearly state that it has an independence to influence.

Table 15Affordability of Home Loan

Do you think the home loan rates are affordable?Observed N Expected N Residual

YES 103 75.0 28.0

29



NO 47 75.0 -28.0Total 150


The table shows that 103 of the respondents answered that the rates of

loan among houses was considered affordable. Furthermore, the count of

expected data is less than to count of being observed. With the residual of 28

respondents who answered Yes, it signifies that the result is a considerable

factors that may influence the buying behavior of person.

CHAPTER 5

RESEARCH FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

This chapter summarized the main areas covered in the thesis,

presents the key findings of the research, proposed conclusions, shows the

research limitation and recommends for the future research.

30



I. Research Findings

The chi-square analysis of the study shows that most of the

demographic profiles of the respondents in exception of their gender have a

significant relation with their intention in purchasing real estate properties. The

data shows that there was no clear relationship in the respondent’s intention in

purchasing in regards of their gender. The conducted research also proved that

the respondent’s personal annual income and their occupation may affect their

intentions in acquiring properties. The respondent’s age was also a considerable

factor on when they must engage themselves to acquire a personal house. The

finished education of the may affect their ideas or preferences on which property

they must acquire or not.

On the other hand, the one variable chi-square test or test of

goodness of fit also revealed that all of the influencing factors considered by the

researcher have a relationship on how they chose a property to acquire. Their

perception in a house as a low price investment pushed them to acquire a

property, and the findings also shows that they used it as a primary residence.

The researchers also found out that most of the respondents living arrangement

before they purchase a property was with their parents. The respondent’s

change of family status was also their main reason why they acquired new

house. They also agreed that the affordability of home loan rates can be added

as a reason why they have the capabilities to purchase real estate properties.

31



II. Conclusions

The study has illustrated the ability of the respondents to show their

intention to purchase real estate. It was shown that the intention to purchase

real estate was influenced by most of the demographic profile of a respondent

and all of the influencing factors were also considered, with the demographic

factor component being more influential.

In conclusion, it is assumed that the outcomes of this study have

contributed some valuable information for researchers, customers, marketers

and real estate owners. It is expected that the result of the survey will provide

information on the intention to buy real estate and which variables affect this

intention. This study provided what influence the intention.

III. Recommendations

Despite of the interesting results, this paper contains several limitations

that may hinder the contribution of this study. Firstly, the sample of the study is

considered relatively small to represent the whole population of Lipa City as the

analysis was based on 150 respondents which may not be sufficient to cover all

range of respondents in terms of various age, education levels and income 32



groups. Secondly, further research may consider broader range of real property

investment determinants, such as reputation and quality of developers. Finally,

the analysis of the study’s result is limited to Lipa City area. Thus, it would be

recommended for future research to extend the research geographically to get a

more comprehensive view on property purchasing intention of a person.

.

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Documents

Revised research22