RESEARCH PROJECT (BMBR5103) THE FATORS AFFECTING ON APARTMENT PURCHASE DECISION OF CUSTOMERS IN HO CHI MINH CITY STUDENT’S FULL NAME : PHAM PHU PHONG STUDENT ID : CGS00018499 INTAKE : MBAOUM0914-K15A ADVISOR’S NAME & TITLE : Assoc Prof NGUYEN PHAN December 2015 Page Advisor’s assessment Advisor’s signature ACKNOWLEDGEMENTS I would like to express my most sincere gratitude to Assoc Prof Phan Nguyen I am deeply indebted for his guidance, patience, valuable comments and suggestions which greatly helped me in the completion of this dissertation I also would like to thank you all my colleagues and friends of HUTECH class for their valuable contributions to give comments and suggestion to revise the questionnaire survey Warmly thanks to my classmates, friends and all anonymous participants, and especially my family for their supports and inspiring me to complete the MBA course December 2015 Pham Phu Phong ABSTRACT The issue of housing preference has been widely researched in housing literature, because it provides valuable information for the planning and development of housing for various residential groups with different needs In Vietnam, the issue has not received proper attention from scholars and developers though the local housing market is going through a phase of rapid development and transformation The main purpose of the study is to investigate the effecting of key factors on housing purchase decision of customers in Ho Chi Minh City with focus on condominiums in new urban areas, due to strong demand of the residential group for the specific type of housing The thesis employed a stated-preference approach with application of direct measurement and conjoint analysis methods to answer research question A total of 400 responses were collected by mean of questionnaires delivered to customers The study finds out a strong positive relationship between top two factors, including “living space”, “distance” and customers’ housing purchase decision The three weaker positive relationship factors are “feature”, “finance” and “environment” to housing decision makers It is also found that there is no difference in decision making of customers according to different demographics consisting of gender, age, marital status, monthly income and education level Analysis of the empirical data shows that, households are most concerned about developers’ commitments and basic quality of the housing units They appreciate child-friendly qualities of the living environment, as well as child-friendly facilities and services, large space, etc The preferences are then discussed in connection to current conditions of Ho Chi Minh City urban areas in order to give implications for urban planning policies and new housing projects Key works: housing, purchase factors, Ho Chi Minh City in Vietnam CONTENTS ACKNOWLEDGEMENTS ABSTRACT LIST OF TABLE LIST OF FIGURE LIST OF ABBREVIATIONS CHAPTER INTRODUCTION 1.1 BACKGROUND 1.2 RESEARCH OBJECTIVES 1.3 RESEARCH QUESTIONS 1.4 OBJECT OF STUDY 1.5 SCOPE OF STUDY 1.6 METHODOLOGY CHAPTER LITERATURE REVIEW 2.1 INTRODUCTION 2.2 APARTMENT MARKET IN VIETNAM OVERVIEW 2.3 FORECASTS APARTMENTS MARKET IN 2015 - 2016 10 2.4 BEHAVIOUR IN PURCHASE DECISION OF CUSTOMER 12 2.5 THE FACTORS IMPACT ON PURCHASE DECISION APARTMENT OF CUSTOMER 16 CHAPTER 3: RESEARCH METHODOLOGY 20 3.1 RESEARCH DESIGN 20 3.2 SAMPLE SIZE 21 3.3 RESEARCH PROCESS 22 3.4 RESEARCH MODEL 25 3.5 MEASUREMENT SCALE 27 3.5.1 Measurement scale factors affecting apartment buying decision 27 3.6 MAIN SURVEY 30 3.7 DATA ANALYSIS METHOD 31 3.7.1 Reliability measure 31 3.7.2 Validity measure by EFA (Exploratory Factor Analysis) 31 3.7.3 Multiple regression analysis 32 CHAPTER 4: DATA ANALYSIS AND RESULTS 34 4.1 STATISTICAL SAMPLES 34 4.2 ASSESSMENT MEASUREMENT SCALE 37 4.3 MULTIPLE REGRESSION ANALYSIS 47 4.4 HYPOTHESIS TESTING BY MULTIPLE REGRESSION 51 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS 57 5.1 RESEARCH OVERVIEW 57 5.2 RESEARCH FINDINGS 58 5.3 MANAGERIAL IMPLICATION 59 REFERENCES 61 APPENDIX 66 LIST OF TABLE Table 3.5: Main factors affecting customer’ housing decision Table 4.1: Characteristics of respondents Table 4.2: Cronbach’s Alpha test results Table 4.3: Total testing results scales Table 4.4: EFA results Table 4.5: EFA results analysis Factor of scale purchase Decision Table 4.6: EFA results analysis Factor adjusted Table 4.7: Correlation among variables Table 4.8: Indicators for assessment the relevance of model (Model Summary) Table 4.9: Regression Model Table 4.10: Coefficient Regression Results Table 4.11: Hypotheses results LIST OF FIGURE Figure 2.2: Condominium market in HCMC Q3-2015 Figure 2.4.3: General model of consumer behavior Figure 2.4.4: Model of consumer behavior (Kotler, 1999) Figure 3.1: Research design Figure 3.3: Research process Figure 3.4: Research model Figure 4.1: Adjust the research model Figure 4.4: Official research model LIST OF ABBREVIATIONS ANOVA Analysis Of Variance CFA Confirmatory Factor Analysis EFA Exploratory Factor Analysis SPSS Statistical Package for Social Scientists EFA Exploratory Factor Analysis GSO Vietnam Government Statistics Office HCMC Ho Chi Minh City Mil Million MLR Multiple Linear Regression CHAPTER INTRODUCTION 1.1 BACKGROUND The property market in Vietnam is showing signs of getting warmer and industry insiders not think there will be another real estate bubble as there was seven years ago The latest housing bubble occurred in Vietnam in the 2007-2008 period, when investors rushed to the realty sector after the stock market went into a crisis The bubble then quickly burst, leaving the market frozen with a huge number of unsold land plots, houses, and apartments (Young news, 2015) Thanks to strong economic growth, and a growing middle class, after almost five years of a housing slump but most important is the new Housing Law and the Law on Real Estate Business These came into effect in July 2015, and allow foreigners and overseas Vietnamese to legally own, sell and transfer real properties (Global property guide, 2015) As many as 5,150 apartments were put on sale in the first quarter of this year, three times the figure last year, according to a survey by realty consultant CBRE (CBRE Releases Q3/2015 Quarterly Report Highlights for Ho Chi Minh City Market) The number of new apartments in the first quarter rose 40 percent year on year, which consultancy Savills said is the strongest growth since February 2011 Most apartment purchasers in Ho Chi Minh City in the year to date have been real homebuyers, who buy to live there, rather than speculators and secondary investors who purchase to resell, according to industry insiders Real estate trading floors in the city are receiving more customers than this time last year, and more purchase contracts have also been closed According to the report of “Vietnam Housing Sector Forecast to 2015” indicates the housing requirement is rising with trend of nuclear families has created immense demand expected to grow around 6% during 2012-2015 Independent Samples Test Levene's Test for Equality of Variances F FEATURE FINANCE ENVIRONME NT Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed 13.103 1.834 0.008 Sig 0.000 0.176 0.929 t-test for Equality of Means t df Sig (2tailed) Std Mean Error Differenc Differenc e e 95% Confidence Interval of the Difference Lower Upper -1.273 398.000 0.204 -0.09391 0.07376 -0.23892 0.05110 -1.293 397.914 0.197 -0.09391 0.07262 -0.23667 0.48850 -1.527 398.000 0.128 -0.13145 0.08611 -0.30074 0.03783 -1.514 371.668 0.131 -0.13145 0.08682 -0.30217 0.03926 -0.891 398.000 0.374 -0.06734 0.07560 -0.30217 0.08128 -0.891 387.106 0.373 -0.06734 0.07558 -0.21593 0.08125 105 LIVINGSPAC E Equal variances assumed Equal variances not assumed 0.500 0.941 -0.562 398.000 0.574 -0.04977 0.08855 -0.22386 0.12432 -0.562 387.029 0.574 -0.04977 0.08855 -0.22383 0.12430 Anova by age N FEATURE FINANCE ENVIRONMENT 4 < 30 30 - 40 41 - 60 > 60 Total < 30 30 - 40 41 - 60 > 60 Total < 30 30 - 40 41 - 60 134 181 70 15 400 134 181 70 15 400 134 181 70 Mean 3.68210 3.52040 3.54290 3.58670 3.58100 3.27910 3.30830 3.17710 3.25330 3.27350 2.98210 2.90940 2.86570 Std Deviation 0.74277 0.74942 0.68537 0.69884 0.73552 0.84142 0.87292 0.80975 1.10961 0.85939 0.79678 0.68813 0.79544 Std Error 0.06417 0.05570 0.81920 0.18044 0.03678 0.07269 0.06488 0.09678 0.28650 0.04297 0.06883 0.05115 0.09507 95% Confidence Interval for Mean Minim um Lower Upper Bound Bound 3.5552 3.8090 2.00 3.4105 3.6300 1.20 3.3794 3.7063 2.00 3.1997 3.9737 3.00 3.5087 3.6533 1.20 3.1353 3.4229 1.00 3.1803 3.4363 1.00 2.9841 3.3702 1.60 2.6389 3.8678 1.60 3.1890 3.3580 1.00 2.8459 3.1182 1.00 2.8085 3.0103 1.00 2.6760 3.0554 1.00 Maxi mum 5.00 5.00 5.00 5.00 5.00 4.80 5.00 5.00 5.00 5.00 4.80 4.60 4.60 106 LIVINGSPACE > 60 Total < 30 30 - 40 41 - 60 > 60 Total 15 400 134 181 70 15 400 2.70670 2.91850 2.66040 2.55940 2.57500 2.25000 2.58440 0.90669 0.75304 0.87057 0.87892 0.86325 1.07736 0.88157 0.23411 0.03765 0.07521 0.06533 0.10318 0.27817 0.04408 2.2046 2.8445 2.5117 2.4305 2.3692 1.6534 2.4977 3.2088 2.9925 2.8092 2.6883 2.7808 2.8466 2.6710 1.00 1.00 1.00 1.00 1.00 1.00 1.00 4.40 4.80 4.75 5.00 4.00 4.00 5.00 Test of Homoeneity of Variances FEATURE FINANCE ENVIRONMENT LIVINGSPACE Levene Statistic 0.410 0.967 0.938 0.932 df1 df2 3 3 396 396 396 396 Sig 0.746 0.408 0.422 0.425 107 ANOVA Sum of Squares Model Between Groups FEATURE Within Groups Total Between Groups FINANCE Within Groups Total Between Groups ENVIRONMENT Within Groups Total Between Groups LIVINGSPACE Within Groups Total Mean Square df 2.135 0.712 213.720 396 0.540 215.855 399 0.879 396 293.800 294.679 0.293 F Sig 1.319 0.268 0.395 0.757 0.837 0.474 1.104 0.347 0.742 399 1.425 396 224.838 226.263 0.475 0.568 399 2.572 396 307.518 310.090 0.857 0.777 399 Testing of T-Test for Marital Status Group Statistics Marital Status Single FEATURE Married Single FINANCE Married Single ENVIRONMENT Married Single LIVINGSPACE Married N Mean 162 238 162 238 162 238 162 238 3.5642 3.5924 3.3049 3.2521 2.9074 2.9261 2.591 2.5798 Std Deviation 0.76146 0.71873 0.84035 0.87322 0.82331 0.70291 0.91092 0.86293 Std Error Mean 0.0598 0.4659 0.6602 0.0566 0.0646 0.0455 0.0715 0.0559 108 Equal variances assumed FEATURE Equal variances not assumed Equal variances assumed FINANCE Equal variances not assumed Equal variances assumed ENVIRONMENT Equal variances not assumed Equal LIVINGSPACE variances Independent Samples Test Levene's Test for Equality t-test for Equality of Means of Variances Std Sig Mean Error F Sig t df (2Differenc Differen tailed) e ce 95% Confidence Interval of the Difference Lower Upper 0.929 0.000 3.865 0.678 0.336 0.986 0.050 0.411 -0.377 398.000 0.707 -0.02824 0.07500 -0.17568 0.11920 -0.372 332.425 0.710 -0.02824 0.07583 -0.17740 0.12092 0.603 398.000 0.547 0.05284 0.08760 -0.11938 0.22506 0.608 354.529 0.544 0.05284 0.08697 -0.11820 0.22387 -0.243 398.000 0.808 -0.01864 0.07679 -0.16961 0.13233 -0.236 308.762 0.814 -0.01864 0.07912 -0.17433 0.13704 0.125 398.000 0.901 0.01122 0.08990 -0.16553 0.18796 109 assumed Equal variances not assumed 0.123 333.286 0.902 0.01122 0.09083 -0.16746 0.18990 Anova by education FEATURE FINANCE ENVIRONMENT High school Colleague University Postgraduate Total High school Colleague University Postgraduate Total High school Colleague N Mean Std Deviati on Std Error 27 66 241 66 400 27 66 241 66 400 27 66 3.59260 3.53640 3.61330 3.50300 3.58100 3.24440 3.28790 3.28460 3.23030 3.27350 2.80000 2.87880 0.84212 0.68402 0.69916 0.86735 0.73552 0.79679 0.87293 0.86803 0.85592 0.85939 0.56559 0.70591 0.16207 0.08420 0.04504 0.10676 0.03678 0.15334 0.10745 0.05591 0.10536 0.04297 0.10887 0.08689 95% Confidence Interval for Mean Lower Upper Bound Bound 3.2595 3.9257 3.3682 3.7045 3.5246 3.7020 3.2898 3.7163 3.5087 3.6533 2.9292 3.5596 3.0733 3.5025 3.1745 3.3948 3.0199 3.4407 3.189 3.3580 2.5762 3.0238 2.7053 3.0523 Minimum Maximum 2.40 2.00 1.20 2.00 1.20 2.00 1.00 1.00 1.60 1.00 1.80 1.60 5.00 5.00 5.00 5.00 5.00 4.80 5.00 5.00 5.00 5.00 3.80 4.60 110 LIVINGSPACE University Postgraduate Total High school Colleague University Postgraduate Total 241 66 400 27 66 241 66 400 2.95770 2.86360 2.91850 2.59260 2.53790 2.60790 2.54170 2.58440 0.78190 0.62300 0.75304 0.78492 0.81008 0.90386 0.91943 0.88157 0.05037 0.09383 0.03765 0.15106 0.09971 0.05822 0.11317 0.04408 2.8585 2.6762 2.8445 2.2821 2.3387 2.4932 2.3156 2.4977 3.0569 3.0510 2.9925 2.9031 2.7370 2.7226 2.7677 2.6710 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 4.80 4.60 4.80 3.50 4.00 5.00 4.75 5.00 Test of Homoeneity of Variances FEATURE FINANCE ENVIRONMENT LIVINGSPACE Levene Statistic 3.831 0.207 0.846 1.547 df1 df2 3 3 396 396 396 396 Sig 0.010 0.891 0.469 0.202 111 Model Between Groups FEATURE Within Groups Total Between Groups FINANCE Within Groups Total Between Groups ENVIRONMENT Within Groups Total Between Groups LIVINGSPACE Within Groups Total ANOVA Sum of df Squares Mean Square 0.787 0.262 215.068 396 0.543 215.856 399 0.190 294.490 294.679 1.052 225.211 226.263 0.398 309.692 310.090 0.063 396 0.744 F Sig 0.483 0.694 0.085 0.968 0.616 0.605 0.170 0.917 399 0.351 396 0.569 399 0.133 396 0.782 399 Kruskal-Wallis education Testing Ranks Education FEATURE High school Colleague University Postgraduate Total N 27 66 241 66 400 Mean Rank 194.96 193.95 207.55 183.56 112 Test Statistics a,b Chi-square df Asymp Sig a Kruskal Wallis Test b Grouping Varianble: Education FEATURE 2.666 0.446 Anova by Career Descriptives FEATURE FINANCE N Mean Std Deviati on 109 85 3.75780 3.40470 0.68533 0.84851 95% Confidence Interval for Mean Minimu Std Error m Lower Upper Bound Bound 0.06564 3.6277 3.8879 2.40 0.09203 3.2217 3.5877 1.20 Semi-professional / Managers 71 3.52390 0.61073 0.07248 3.3794 3.6685 2.20 5.00 Business Owner 52 3.30000 0.84343 0.11696 3.0652 3.5348 2.00 5.00 83 400 109 3.75420 3.58100 3.32290 0.59864 0.73552 0.89398 0.06571 0.03678 0.08563 3.6235 3.5087 3.1532 3.8849 3.6533 3.4927 3.00 1.20 1.00 5.00 5.00 5.00 Officer staff Business Others Total Officer staff Maxim um 5.00 5.00 113 ENVIRONMENT LIVINGSPACE Business 85 3.25410 0.82427 0.08940 Semi-professional / Managers 71 3.18030 0.88231 0.10471 Business Owner 52 3.19230 0.88647 0.12293 83 400 109 85 3.35900 3.27350 2.91930 2.76000 0.81794 0.85939 0.78227 0.73731 0.08978 0.04297 0.07493 0.07997 Semi-professional / Managers 71 2.91830 0.7152 0.08488 Business Owner 52 2.86540 0.77381 0.10731 83 400 109 85 3.11330 2.91850 2.64220 2.53530 0.72192 0.75304 0.91564 0.93554 Semi-professional / Managers 71 2.48940 Business Owner 52 83 400 Others Total Officer staff Business Others Total Officer staff Business Others Total 3.0763 3.4319 1.00 5.00 3.3891 1.40 5.00 3.4391 1.60 5.00 3.5376 3.3580 3.0678 2.9190 1.80 1.00 1.00 1.20 4.80 5.00 4.80 4.60 3.0876 1.00 4.60 2.6500 3.0808 1.00 4.40 0.07924 0.03765 0.08770 0.10147 2.9556 2.8445 2.4684 2.3335 3.2709 2.9925 2.8160 2.7371 1.00 1.00 1.00 1.00 4.60 4.80 5.00 4.75 0.80782 0.09587 2.2982 2.6806 1.00 3.75 2.44710 0.90929 0.12610 2.1940 2.7003 1.00 4.25 2.72590 2.58440 0.81395 0.88157 0.08934 0.04408 2.5482 2.4977 2.9036 2.6710 1.00 1.00 4.00 5.00 2.9714 2.9455 3.1804 3.189 2.7707 2.601 2.749 114 Test of Homoeneity of Variances FEATURE FINANCE ENVIRONMENT LIVINGSPACE Levene Statistic 4.096 0.245 0.222 0.819 Model Between Groups FEATURE Within Groups Total Between Groups FINANCE Within Groups Total Between Groups ENVIRONMENT Within Groups Total Between Groups LIVINGSPACE Within Groups Total df1 4 4 df2 395 395 395 395 ANOVA Sum of Squares Sig 0.003 0.912 0.926 0.514 Mean Square df 12.876 3.219 202.979 395 0.514 215.856 399 1.865 292.814 294.679 5.430 220.833 226.263 3.851 306.238 310.090 0.466 395 0.741 F Sig 6.264 0.000 0.629 0.642 2.428 0.047 1.242 0.293 399 1.358 395 0.559 399 0.963 395 0.775 399 115 Anova by Income Descriptives Mean Std Deviati on Std Error 95% Confidence Interval for Mean Lower Upper Bound Bound 50 3.5560 0.8517 0.1205 3.3140 3.7980 1.20 5.00 167 3.6886 0.6783 0.0525 3.5850 3.7922 2.60 5.00 115 3.5391 0.6899 0.0643 3.4117 3.6666 2.20 5.00 68 3.4059 0.8235 0.0999 3.2065 3.6052 2.00 5.00 400 3.5810 0.7355 0.0368 3.5087 3.6533 1.20 5.00 50 3.2960 0.7658 0.1083 3.0784 3.5136 1.00 4.80 167 3.2503 0.8927 0.0691 3.1139 3.3867 1.00 5.00 115 3.3009 0.8545 0.0797 3.1430 3.4587 1.80 5.00 68 3.2676 0.8657 0.1050 3.0581 3.4772 1.60 5.00 400 3.2735 0.8594 0.0430 3.1890 3.3580 1.00 5.00 N FEATURE FINANCE < million VND – 15 million VND 15 – 30 million VND > 30 million VND Total < million VND – 15 million VND 15 – 30 million VND > 30 million VND Total Minimum Maximum 116 ENVIRONMENT LIVINGSPACE < million VND – 15 million VND 15 – 30 million VND > 30 million VND Total < million VND – 15 million VND 15 – 30 million VND > 30 million VND Total 50 2.8160 0.7089 0.1003 2.6145 3.0175 1.60 4.40 167 2.9988 0.7358 0.0569 2.8864 3.1112 1.20 4.80 115 2.8191 0.7317 0.0682 2.6840 2.9543 1.00 4.80 68 2.9647 0.8450 0.1025 2.7602 3.1692 1.00 4.60 400 2.9185 0.7530 0.0377 2.8445 2.9925 1.00 4.80 50 2.4500 0.8777 0.1241 2.2006 2.6994 1.00 4.00 167 2.6707 0.8445 0.0654 2.5416 2.7997 1.00 4.50 115 2.5000 0.8910 0.0831 2.3354 2.6646 1.00 5.00 68 2.6140 0.9497 0.1152 2.3841 2.8438 1.00 4.25 400 2.5844 0.8816 0.0441 2.4977 2.6710 1.00 5.00 Test of Homoeneity of Variances FEATURE FINANCE ENVIRONMENT LIVINGSPACE Levene Statistic 1.593 0.609 0.692 0.929 df1 df2 3 3 396 396 396 396 Sig 0.191 0.61 0.557 0.427 117 Model Between Groups FEATURE Within Groups Total Between Groups FINANCE Within Groups Total Between Groups ENVIRONMENT Within Groups Total Between Groups LIVINGSPACE Within Groups Total ANOVA Sum of df Squares Mean Square 4.252 3.000 1.417 211.603 396.000 0.534 215.856 399.000 0.204 3.000 0.068 294.475 396.000 0.744 294.679 399.000 2.883 3.000 0.961 223.380 396.000 0.564 226.263 399.000 3.024 3.000 1.008 307.065 396.000 0.775 310.090 399.000 F Sig 2.653 0.048 0.091 0.965 1.704 0.166 1.300 0.274 118 CHART ASSUMPTION Chart Histogram Dependent Variable: DECISION Mean = -1.73E-15 Std.Dev = 0.994 N=400 Frequency Regression Standardized Residual Scatterplot Dependent Variable: DECISION Regression Standardized Residual Regression Standardized Residual 119 ... apartments/condominiums in Ho Chi Minh City 1.2 RESEARCH OBJECTIVES To determine factors affecting on apartment purchase decision of customers in Ho Chi Minh city The thesis aims to understand buying... - H1: The factor “feature”, there is a positive impact on customers? ?? apartment purchase decision in Ho Chi Minh city 25 Distance: One of the most important factors affecting decision making to... - How is impact of these factors on apartment purchase decision of customers evaluated in HCM context? Understanding relationship between main factors affecting customer house purchase decision