IFUGAO STATE UNIVERSITYLamut, Ifugao, Philippines

TITLE:

CONSUMER PURCHASE DECISIONS FOR AFFORDABLE HOUSING IN SOURTHERN

VIETNAM

March, 2015

Paradigm of the study

-Consumer behavior theory is used .- Positivist approach: The paradigm lays emphasis on science as a means of explaining behavior. “Rational decision making and problem solving” is the key.-The decision making perspective emphasizes the rational, logical and cognitive approach to consumer decision making and purchase process.

Paradigm of the study

Dimensions affecting purchase housing deciding•Physical housing•Location•Environment•Customer finance•Marketing•Legal•Policies (moderator)

Profile of Respondents•Age•Gender•Educational •Household size•Income•Employer•House owner

status

Input Process

Proposed intervention program to improve the purchase affordable housing decisions in South Viet Nam.

Output

Statement of the Problem:

1) What is the profile of customers according to :AgeGenderEducational backgroundHousehold sizeMonthly IncomeEmployerHouse owner status2) What is the status of dimensions

• Physical housing• Location • Environment• Customer finance3) Is there significant difference on the status of

customers purchase decision their profile variables?4) Is there significant relationship between customers

purchase decisions and the status of dimensions?

5) What are the government policies?6) Is there significant difference on the customers purchase decision their perception about government policies?7) What intervention program is proposed to improve the purchase decision?

Defining affordable housing

Defining affordable housing in Vietnam in this study base on

Resolution No. 02/NQ-CP: affordable housing includes

commercial housing and social housing which housing with

area less than 70m2 and price bellow VND 15 million/m2.

( kind of housing have price below 1,050 million/per

housing)

Research Objectives

The overall aim of the research is to investigate the main factors affecting consumer purchase decision of Affordable Housing in Vietnam.The specific research objectives are:1. To isolate the factors influencing purchasing decision.2. To analyse the impact of each factor to consumer purchase decisions in affordable housing in Vietnam.3. To provide a model of consumer purchase decision in affordable housing in Da Nang, Ho Chi Minh city, An Giang in Vietnam.

Research Questions

1. What are the factors that influence buying behavior of Vietnamese toward affordable housing ?2. Are there any differences in the influencing factors toward the consumers’ demographic factor?3. Are there any differences in the influencing factors toward the consumers’ perception about affordable housing policy?

Conceptual research model of the study

Policy

Physical

Location

Environment

Finance

Marketing

Legal

Purchasing decision

Demographic

Examinations purchasing decision framework of previous studies

Thankon R. et al (2009); Haddad M. et al (2011); Essays, UK. (November 2013)Phan (2012)Noted:1)Feng Shui: Feng Shui is literally interpreted to mean wind and water. It is a conventional practice to harmonize individuals with their surroundings and to foster prosperity.Sidi (2010) (Xu, 1998) (Tse & Love, 2000; Wang & Li, 2006) (Mohit et al .,2010)2)Almost Vietnamese customers aren’t important to housing legal so there are many serious consequences. 3)Policy factor don’t have appearance in past models.

Hypotheses

Ho1: Respondents did not significantly adopt the main constructs of the study when buying affordable housing decision.Sub-hypotheses for (Ho1)Ho11: Respondents did not significantly adopt to the physical of the study when buying affordable housing.Ho12: Respondents did not significantly adopt to the location of the study when buyinog affordable housing.Ho13: Respondents did not significantly adopt to the environment of the study when buying affordable housing.

Hypotheses ( cont.)

Ho14: Respondents did not significantly adopt to the consumer’s finance of the study when buying affordable housing.Ho15: Respondents did not significantly adopt to the legal aspect of the study when buying affordable housing.Ho16: Respondents did not significantly adopt to the marketing of the study when buying affordable housing.

Hypotheses (cont.)

Ho2: There were no significant differences among buying affordable housing decision with respect to the specific demographic characteristics .Ho3: There were no significant differences among buying affordable housing decision with respect to the specific policy housing

Limitations of the study

• Limited a sample of prospective buyer respondents .• the one-shot survey only captures a certain point in

time. • The third limitation arises from the way that

respondents are recruited.

Research method

This quantitative research method (Bryman and Bell, 2007) will be applied in this study via closed questions in questionnaires to obtain information with its aim to explain how the factors impacting on consumer buying behavior in current context of affordable housing.The descriptive research design in cross-sectional study is used in this research to involve buying affordable housing behavior survey. (Singh,2007)

Appropriateness of Design

This study is using deductive approach (Wilson, 2010, p.7) and follows the following stages:-Deducing hypothesis from theory-Formulating hypothesis in operational terms and proposing relationships between two specific variables-Testing hypothesis with the application of relevant method(s)-Examining the outcome of the test, and thus confirming or rejecting the theory.-Modifying theory in instances when hypothesis is not confirmed.

Population and Locale of the Study

Cluster sampling (Jackson, 2011) is used to answer the research question and objective. Respondents are all potential customers of NHO’s affordable housing projects and registered buy housing at Construction Departments .Sample size : 400 participants include 50 Da nang, 50 An Giang and 300 Ho Chi Minh city. (Total sample 1 million and at a 95 confidence level in Saunders, Lewis, & Thornhill, 2011,p.219)

Data Gathering Tools

A survey is hand-delivered to consumers in Ho Chi Minh, Angiang and Danang in Vietnam . The questionnaires consisted of two main sections: background information of respondents and variables from the literature that are created for this research (see Appendix 1). Questions used a five-point Likert scale from 1 = ‘very unimportant’ to 5 = ‘very important’.A modified Delphi technique assisted in developing the questionnaires (Incomreal )

Variables table

Section Variable Items

I Physical 15

II Location 6

III Environment 8

IV Customer finance 10

V Marketing 8

VI Legal 3

VII Housing policy 2

VIII Purchase decision 5

Demographic 7

Preliminary Analysis

First , descriptive statistics Second, reliability: Cronbach’s anpha >0.7 and <0.95 Third, Pretesting of questionnaire Fourth , Factor analysis (4 steps)Step 1: the correlation matrix: Correlation coefficients > 0.3; KMO :0.5 <=KMO<=1 and Bartlett’s test <0.001Step 2: Factor extractionPrincipal components analysis: Eigen Values > 1 and Scree plot.Step 3: Factor rotation Varimax rotationsStep 4: Choose factors: Makes sense; Will be easy to interpret; Simple structure and Lacks complex loadings.

Hypotheses test

Independent Analysis: one sample t-test .Control Analysis: independent sample t-test and one-way ANOVAModeration Analysis:First step: control variable To test the possibility of such effect, each of control variable‟ dimensions (predictor) and housing policy (moderator) were multiplied to create an interaction construct (demographic × housing policy) to predict purchasing decision factors

Hypotheses test (cont.)Second step: main variable To test the possibility of such effect, each of main factors‟ dimensions (predictor) and housing policy (moderator) were multiplied to create an interaction construct (main factors × housing policy) to predict purchasing decision factors . In this case, main factors is a hierarchical construct, which comprises 6 different dimensions including Physical , Location, Environment, Finance, Marketing and Legal, while government policy is a simple latent construct, which comprises 2 items, thus, the interaction construct represents 15 items (5×2), 6 items (2×3), 15 items (5×3), 6 items (2×3), 9 items (3×3), 6 items (2×3), 12 items (4×3), 18 items (6×3), and 12 items (4×3) for Physical , Location, Environment , Finance, Marketing and Legal respectively.Third step: (moderating effect )Regulatory

Main references

Barry, D.W.(2014) Vietnam real estate industry . Ha noi VPBS report.Gibler,K.M.,& Nelson, S.L.(2003) Consumer Behavior Applications to Real Estate Education ; Journal of Real Estate Practice and Education Luo, Q.,& James, P.T.J.,(2013) Influences on the buying behavior of purchasing commercial housing in Nanning city of Guangxi province ; Journal of Management and Marketing Research Essays UK (2014), Factors affecting the purchase decision of apartments in metropolitan India ; http://www.ukessays.com/essays/property/apartments-in-metropolitan-india.php

Main references

• Haddad,M., Judeh, M.,& Haddad,S.,(2011) Factors Affecting Buying Behavior of an Apartment an Empirical Investigation in Amman, Jordan ; Research Journal of Applied Sciences, Engineering and Technology 3(3): 234-239, 2011

• Ratchatakulpat, T, Miller, P & Marchant, T(2009) Residential real estate purchase decision: is it more than location?, International Real Estate Review, vol. 12, no. 3, pp. 237-294.

• Reed,R.,& Mills, A.(2007) Identifying the drivers behind housing preferences of first-time owners; Property Management Vol. 25 No. 3, 2007 Emerald

• Bryman, A. and Bell, E. (2007). Business Research Methods, 2nd ed., Oxford: Oxford University Press.

Main references

• Jackson, SL, 2011, Research Methods and Statistics: A Critical Approach, 4th edition, Cengage Learning.

• Singh, K, (2007), Quantitative Social Research Methods, SAGE Publications

Questionaires

Part 1: Asset factors affecting consumer buying behavior How important to you are the following aspects of buying decision in affordable housing ?Please stick on the available boxes in each question with the meaning as follows:1: not at all important 2: Slightly important3: important4: Fairly important5: very important

No. Content 1 2 3 4 5  Physical influences          1 Design optimization          2 Adaptability          3 Exterior look of housing          4 Decoration          5 Number of rooms          6 Air circulation, natural sunlight , brightness and natural ventilation

of the house         

7 Size of individual rooms          8 The frontage and depth of land          9 Water supply and sewerage          10 Power Backup          11 Fire-fighting systems          12 Garbage disposal          13 Others housing services such as balcony, number of socket , parapet

wall, swimming pool         

14 Material          15 Method construction such as innovativeness, performance and

engineering         

  Location influences 1 2 3 4 516 Proximity to community          17 Proximity to amenities          18 Proximity to relatives’ home          19 Transport          20 Any plan for roadworks , amenities and public establishments in the

future         

21 Feng Shui            Environment influences          22 Attractive views          23 Quality of neighborhood facilities          24 Status of neighborhood such as owner’s occupation, education and

income         

25 Cleanliness          26 Security          27 Community relation          28 Density of housing          29 Open space            Customer finance influences          30 Is ownership expense important?          31 Is the ability to pay down payment necessary?          32 The ability to pay monthly payments for housing          33 Interest rate at the moment and in the future          34 Processing time of the loan          35 Maximum mortgage          36 Maximum monthly bank payment          37 Ratable value of the house          38 Length of time house was on the market          39 Recorded mortgage.          

  Marketing influences 1 2 3 4 540 House pricing is a key factor          41 Maintenance and utility cost influences buying decision          42 Advertising is an important information channel          43 Direct communication between the developer and the buyer impacts buying

decision         

44 Honest information relayed to the buyers          45 The buyers perceived risks of the housing          46 Branded building components and builder’s reputation are important.          

47 Reports of other buyers.          48 Legal influences

Sale house when enough legal.         

49 Purchasing procedures is a barrier in affordable housing          50 Limited transfer right affects purchasing housing decision            Housing policies influences          51 The role that the government plays in the development of affordable housing

in Vietnam .         

52 Implementing efficiency of housing policy          

  Purchasing decision  1  2  3  4  5

53 Searching for various sources of residential property information is necessary when making a purchase

         

54 The best method of finding residential property is :          

1 Through a real estate agent.          

2 Seeing signage on the property          

3 From friend /relatives recommendation          

4 Searching the internet          

55 I usually inspect less than 3 properties when making a purchase          

56 Who has the most the most influence when you make a decision of buying housing ?

         

1 Parents          

2 Friend          

3 Children          

4 Husband/Wife          

5 Myself          

57 When you bought housing, how long had you been seriously thinking about buying the most recent one?

         

Part 2 : Demographic information 58/ Please answer the following questions:MaleFemale59/ How old are you?< 2425-3435-4445- 5560/ What is your household size?SingleCoupleThree or more61/ What is your educational level?College/ University Master/Ph.DOthers

Part 2 : Demographic information 62/ What is your household’s income level per month ?<10 million VND.10-18 million VND.>1863/ What is your employer?Public Private64/ Have you owned a house?YesNo

THANK YOU!