Key factors influencing on apartment purchase decision of customers in ho chi minh city

RESEARCH PROJECT (BMBR5103) KEY FACTORS INFLUENCING ON APARTMENT PURCHASE DECISION OF CUSTOMERS IN HO CHI MINH CITY STUDENT ‘S FULL NAME : PHAM THI NGOC VAN STUDENT ID : CGSVN00015047 INTAKE : MBAOUM0313 ADVISOR’S NAME & TITLE : A Prof PHAN DINH NGUYEN September 2014 Page ADVISOR’S ASSESSMENT Advisor’s signature i ACKNOWLEDGEMENTS First of all, I would like to express my sincere thanks to my thesis coach – A Prof Phan Dinh Nguyen for dedicated deep guidance, precious advice and teaching me data analysis guidance in his precious time 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 Sep 2014 Pham Thi Ngoc Van ii ABSTRACT The speed of growing population in a recent decade together with the economic development, the demand of housing is more and more increasing while the price of ownership is big issue at Vietnam Condominium is becoming the convenient living model for people stay in big cities such as: Ha Noi, HCM and Da Nang where the demand of living and working of immigration increasing The beneficial view of condominium is the residents can enjoy convenient facilities from their own apartment to opening space with greenery system anywhere The demand of condominium in big cities is certain and especially at Ho Chi Minh City where the research will pay attention real demand for middle income people The researcher will identify factors or determinants influence on the demand of buying apartments at HCM City The study aims to identify the key factors affecting the decision of customers to buy residential apartments in HCMC For study purpose, a sample of 300 salaried class persons was taken by using purposive sampling technique The sample consisted of those respondents who either bought an apartment or are planning to buy Respondents were asked to give their opinion about listed variables on Five-point Likert Scale By using Exploratory Factor Analysis, six factors were extracted which explained 73.916 per cent of total variance iii Contents ADVISOR’S ASSESSMENT i ACKNOWLEDGEMENTS .ii ABSTRACT iii LIST OF TABLE vii LIST OF FIGURE ix LIST OF ABBREVIATIONS x CHAPTER INTRODUCTION 2.1 BACKGROUND 2.2 PROBLEM STATEMENT 2.3 RESEARCH OBJECTIVES 2.4 RESEARCH QUESTIONS 2.5 SCOPE OF STUDY 2.6 METHODOLOGY 2.7 CHAPTER OVERVIEW CHAPTER LITERATURE REVIEW 2.1 APARTMENT OVERVIEW 2.2 LITERATURE REVIEW 11 2.2.1 Feature 11 2.2.2 Finance 12 2.2.3 Distance 12 2.2.4 Facilities 13 2.2.5 Environment 13 2.2.6 Purchase decision 14 2.3 CONCEPTUAL FRAMEWORK 14 iv CHAPTER RESEARCH METHODOLOGY 16 3.1 RESEARCH PROCESS 16 3.2 SAMPLE SIZE 19 3.3 MEASUREMENT SCALE 19 3.3.1 Measurement scale 19 3.3.2 Pilot test 19 3.4 MAIN SURVEY 22 3.5 DATA ANALYSIS METHOD 23 3.5.1 Reliability measure 23 3.5.2 Validity measure by EFA (Exploratory Factor Analysis) 23 3.5.3 Multiple regression analysis 24 CHAPTER DATA ANALYSIS AND RESULTS 26 4.1 PREPARATION 26 4.1.1 Editing 26 4.1.2 Coding 26 4.2 DESCRIPTIVE DATA 29 4.3 ASSESSMENT MEASUREMENT SCALE 32 4.3.1 Cronbach’s Alpha 32 4.3.2 Exploratory Factor Analysis (EFA) 37 4.4 HYPOTHESES TESTING BY MULTIPLE REGRESSION 42 4.4.1 Checking assumption of Multiple Regression 42 4.4.2 Evaluating the model 43 4.4.3 Evaluating the independent of variables 43 4.4.4 Checking hypotheses of model 44 4.4.5 Analysis effect of control variables by Multiple Regression 46 CHAPTER CONCLUSIONS AND IMPLICATIONS 47 5.1 RESEARCH OVERVIEW 47 v 5.2 RESEARCH FINDINGS 47 5.3 MANAGERIAL IMPLICATION 48 5.4 RESEARCH LIMITATIONS & DIRECTIONS FOR FUTURE RESEARCH HYPOTHESIS 49 REFERENCES 50 Appendix 1: Vietnamese questionnaire 64 Appendix 1: English questionnaire 69 vi LIST OF TABLE Table 3.1: Main factors affecting customers’ housing purchase decision 21 Table 4.1: Codebook of questionnaire items 26 Table 4.2: Characteristics of respondents 29 Table 4.3: Cronbach’s Alpha test results 34 Table 4.4: EFA results 39 Table 4.5: Correlations among variables 41 Table 4.6: Coefficient table of MLR 44 Table 4.7: Hypotheses results 45 Table 4.8: Descriptive statistics 74 Table 4.9: Cronbach’s Alpha with full items for each constructs 75 Table 4.10: KMO and Bartlett’s test 76 Table 4.11: Total variance explained 77 Table 4.12: Correlation among variables (Partial only) 78 Table 4.13: Factor Matrix 79 Table 4.14: Factor Correlation Matrix 80 Table 4.15: Model summary 80 Table 4.16: Anova 80 Table 4.17: Casewise diagnostics 81 Table 4.18: Residuals statistics 81 Table 4.19: Coefficients of MLR including Gender_Render 85 Table 4.20: Coefficients of MLR including Marital_Render 85 Table 4.21: Coefficients of MLR including Education_Render 86 vii Table 4.22: Coefficients of MLR including Age_Render 86 Table 4.23: Coefficients of MLR including Occupation_Render 87 Table 4.24: Coefficients of MLR including Income_Render 87 viii LIST OF FIGURE Figure 2.1 : Research Model 15 Figure 3.1: Research process 18 Figure 4.1: Scree plot 78 Figure 4.2: Regression standardized residual 82 Figure 4.3: Normal P-P plot 83 Figure 4.4: Scatterplot 84 ix Env03 View Env04 Pollution Env05 Living space Env06 Private DECISION: Scale from to 5: Totally disagree Disagree Neutral Agree Totally agree Decision Agreement level Dec01 Planning to buy a new apartment Dec02 Making effort to buy a new apartment Dec03 An important person affecting apartment purchase decision Thank you very much! 73 Table 4.8: Descriptive statistics Descriptive Statistics N Minimum Maximum Mean Std Deviation Gender 230 1.68 0.47 Age 230 1.53 0.52 Education 230 3.24 0.60 Occupation 230 1.20 0.57 Marital 230 1.43 0.98 Income 230 2.08 1.04 Size 229 2.61 0.98 Price 229 1.16 0.45 Type 227 1.31 0.56 Valid N (listwise) 227 74 Table 4.9: Cronbach’s Alpha with full items for each constructs Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Squared Multiple Correlation Cronbach's Alpha if Item Deleted Fea01-Apartment size/usable area 22.45 7.340 653 690 591 Fea02-Status of apartment legal 24.03 7.811 465 347 641 Fea03-Interior design and decoration 23.15 8.319 557 511 632 Fea04-External design 22.59 8.881 400 323 665 Fea05-Construction quality 23.35 7.461 743 794 580 Fea06-Construction duration 23.71 8.171 253 096 712 Fea07-Type of apartment 23.48 9.037 080 032 767 Fin01-Apartment price 23.59 14.391 587 588 734 Fin02-Maximum mortgage 24.77 13.975 360 174 782 Fin03-Maximum monthly repayment 24.36 11.673 767 750 682 Fin04-Interest rate 24.14 12.356 714 708 698 Fin05-Income 23.73 13.445 705 684 710 Fin06-Payment duration 24.26 14.357 489 295 748 Fin07-Registration fee 24.75 17.323 013 020 834 Dis01-Location close to own family 22.66 12.278 578 670 719 Dis02-Distance to workplace 22.53 9.831 700 859 680 Dis03-Distance to CBD 22.93 11.197 772 877 677 Dis04-Distance to schools 22.98 11.030 767 772 676 22.05 13.569 377 155 756 Dis05-Distance to markets, shopping centers Dis06-Distance to recreation centers 22.96 14.239 139 041 806 Dis07-Access to the main street 22.78 13.824 202 053 794 Fac01-Fire prevention & extinguish system 13.38 4.638 468 366 497 Fac02-Electricity and water supply system 13.34 4.714 536 382 473 Fac03-Basic facility 13.91 4.249 520 340 461 Fac04-Sewage system 12.58 4.856 371 188 549 Fac05-Parking place 13.09 6.158 012 002 726 Env01-Community / Neighborhood 20.83 5.970 700 653 696 Env02- Apartment security 24/24 20.67 6.537 583 534 728 Env03-View 19.91 6.773 284 116 785 Env04-Pollution 20.47 4.791 728 710 664 Env05-Living space 20.15 5.306 677 649 685 Env06-Private 20.96 6.300 272 114 807 75 Dec01-Planning to buy a new apartment Dec02-Making effort to buy a new apartment Dec03-An important person affecting apartment purchase decision 6.33 1.693 794 785 617 6.07 3.013 461 213 928 6.26 2.141 819 786 598 Table 4.10: KMO and Bartlett’s test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity 779 Approx Chi-Square 3861.507 df 276 Sig 0.000 76 Table 4.11: Total variance explained Total Variance Explained Extraction Sums of Squared Loadings Initial Eigenvalues % of Variance Cumulative % 6.335 26.395 26.395 3.099 12.914 2.860 Rotation Sums of Squared Loadings % of Variance Cumulative % Cumulative % 6.047 25.196 25.196 3.227 39.309 2.746 11.440 36.636 4.706 11.917 51.226 2.560 10.666 47.302 3.129 2.259 9.412 60.638 1.954 8.144 55.446 4.02 1.647 6.864 67.502 1.224 5.101 60.547 3.491 1.166 4.857 72.359 890 3.710 64.257 3.105 846 3.524 75.883 807 3.362 79.245 684 2.849 82.094 10 625 2.604 84.698 11 541 2.255 86.953 12 524 2.183 89.136 13 473 1.972 91.108 14 418 1.740 92.848 15 348 1.450 94.298 16 258 1.077 95.375 17 249 1.038 96.413 18 189 786 97.199 19 156 650 97.849 20 134 558 98.407 21 129 540 98.947 22 112 469 99.416 23 086 360 99.776 24 055 228 100.004 Component Total Total Extraction Method: Principal Component Analysis 77 Table 4.12: Correlation among variables (Partial only) Inter-Item Correlation Matrix Dis01-Location close to own family Dis02-Distance to workplace Dis03-Distance to CBD Dis04-Distance to schools Fin01-Apartment price Fin03-Maximum monthly repayment Fin04-Interest rate Dis01Location close to own family Dis02Distance to workplace Dis03Distance to CBD Dis04Distance to schools Fin01Apartment price Fin03Maximum monthly repayment Fin04Interest rate 1.000 447 567 800 -.002 032 018 447 1.000 918 667 074 189 160 567 918 1.000 735 058 148 136 800 667 735 1.000 069 105 094 -.002 074 058 069 1.000 505 751 032 189 148 105 505 1.000 763 018 160 136 094 751 690 1.000 Figure 4.1: Scree plot 78 Table 4.13: Factor Matrix Factor Matrix a Factor Dis02-Distance to workplace 578 Dis03-Distance to CBD -.320 727 Dis04-Distance to schools -.301 756 Dis05-Distance to markets, shopping centers -.386 742 Fin01-Apartment price 677 Fin03-Maximum monthly repayment Fin04-Interest rate Fin05-Income 340 767 353 796 318 712 Fin06-Payment duration 445 Fea01-Apartment size/usable area Fea02-Status of apartment legal 349 773 451 419 Fea03-Interior design and decoration 629 Fea04-Construction duration 479 Fea05-Construction quality 393 Env01-Community / Neighborhood Env02- Apartment security 24/24 Env03-View Env06-Private Fac01-Fire prevention & extinguish system 79 894 597 473 368 553 590 530 469 668 435 460 -.365 Fac02-Electricity and water supply system Fac03-Basic facility Dec01-Planning to buy a new apartment Dec02-Making effort to buy a new apartment Dec03-An important person affecting apartment purchase decision 426 485 407 466 759 -.384 605 -.413 691 -.476 -.303 347 Table 4.14: Factor Correlation Matrix Factor 1.000 149 099 140 184 107 149 1.000 216 553 436 393 099 216 1.000 136 116 299 140 553 136 1.000 214 360 184 436 116 214 1.000 352 107 393 299 360 352 1.000 Extraction Method: Principal Axis Factoring Rotation Method: Promax with Kaiser Normalization Table 4.15: Model summary b Model Summary Model R R Square a Adjusted R Square 356 Std Error of the Estimate 341 66944 Table 4.16: Anova a ANOVA Model Regression Residual Total Sum of Squares Mean Square df 55.385 11.077 100.385 224 448 155.770 229 80 F 24.717 Sig .000 b a Dependent Variable: Decision b Predictors: (Constant), Environment, Feature, Finance, Facility, Distance t Table 4.17: Casewise diagnostics Casewise Diagnostics Case Number Std Residual 105 205 a Predicted Value Decision Residual -3.230 1.67 3.8290 -2.16230 -3.366 1.67 3.9198 -2.25310 a Dependent Variable: Decision Table 4.18: Residuals statistics Residuals Statistics Predicted Value Std Predicted Value Standard Error of Predicted Value Adjusted Predicted Value Residual Std Residual Stud Residual Deleted Residual Stud Deleted Residual Mahal Distance Cook's Distance Centered Leverage Value a Maximum 1.5514 4.2230 3.1391 4918 230 -3.228 2.204 000 1.000 230 049 257 101 038 230 1.54400 4.21860 3.13920 49203 230 -2.25310 1.68163 00000 66209 230 -3.366 2.401 000 989 230 -3.410 2.456 000 1.004 230 -2.31343 1.68163 -.00011 68290 230 -3.4950 2.484 -.001 1.010 230 255 32.710 4.978 5.072 230 000 091 005 012 230 001 143 022 022 230 a Dependent Variable: Decision 81 Mean Std Deviation Minimum N Figure 4.2: Regression standardized residual 82 Figure 4.3: Normal P-P plot 83 Figure 4.4: Scatterplot 84 Table 4.19: Coefficients of MLR including Gender_Render Coefficients Unstandardized Coefficients Standardized Coefficients Collinearity Statistics Correlations Zeroorder Partial Part Tolerance 360 156 -.061 -.047 868 1.151 1.594 112 189 106 082 935 1.069 535 9.111 000 574 521 469 768 1.302 066 280 4.928 000 399 313 254 820 1.220 -.135 076 -.104 -1.780 076 214 -.118 -.092 781 1.280 -.133 080 -.087 -1.663 098 -.053 -.111 -.086 963 1.039 B Std Error a Model (Constant) 779 412 Feature -.070 076 Finance 088 Distance Facility Beta t Sig 1.892 060 -.051 -.917 055 085 492 054 326 Environment Gender VIF a Dependent Variable: Decision Table 4.20: Coefficients of MLR including Marital_Render Coefficients Unstandardized Coefficients Standardized Coefficients Collinearity Statistics Correlations Zeroorder Partial Part Tolerance 485 156 -.047 -.036 886 1.129 1.433 153 189 096 074 943 1.060 520 8.845 000 574 510 456 770 1.298 067 290 5.064 000 399 321 261 810 1.235 -.125 076 -.096 -1.649 101 214 -.110 -.085 785 1.274 -.136 102 -.069 -1.329 185 -.070 089 069 984 1.017 B Std Error a Model (Constant) 746 412 Feature 053 076 Finance 079 Distance Facility Beta t Sig 1.811 072 038 700 055 076 478 054 338 Environment Marital a Dependent Variable: Decision 85 VIF Table 4.21: Coefficients of MLR including Education_Render Coefficients Unstandardized Coefficients Standardized Coefficients Collinearity Statistics Correlations Zeroorder Partial Part Tolerance 500 156 -.045 -.035 886 1.129 1.512 132 189 101 078 937 1.067 533 9009 000 574 517 465 764 1.309 067 280 4.911 000 399 312 254 819 1.221 -.126 076 -.096 -1.651 100 214 -.110 -.085 785 1.274 -.143 149 050 961 338 037 -.050 -.050 970 1.031 B Std Error a Model (Constant) 610 407 Feature 051 076 Finance 084 Distance Facility Beta t Sig 1.502 135 -.037 -.676 056 081 490 054 327 Environment Education VIF a Dependent Variable: Decision Table 4.22: Coefficients of MLR including Age_Render Coefficients Unstandardized Coefficients Standardized Coefficients Collinearity Statistics Correlations Zeroorder Partial Part Tolerance 480 156 -.047 -.036 886 1.129 1.478 141 189 098 076 943 1.071 522 8.896 000 574 312 459 773 1.294 066 279 4.902 000 399 512 253 819 1.221 -.126 076 -.097 -1.663 098 214 -.111 -.086 785 1.274 -.558 402 -.072 -1.389 166 -.166 -.093 -.072 994 1.006 B Std Error a Model (Constant) 1.217 578 Feature -.054 076 Finance 082 Distance Facility Beta t Sig 2.105 036 -.039 708 055 078 480 054 325 Environment Age a Dependent Variable: Decision 86 VIF Table 4.23: Coefficients of MLR including Occupation_Render Coefficients Unstandardized Coefficients Standardized Coefficients Collinearity Statistics Correlations Zeroorder Partial Part Tolerance 522 156 -.043 -.032 885 1.129 1.467 144 189 098 074 943 1.067 526 9.135 000 574 522 463 775 1.291 065 284 5.070 000 399 321 257 820 1.220 -.137 075 -.105 -1.833 068 214 -.122 -.093 783 1.277 -.419 133 -.160 -3.149 022 -.163 -.206 -.160 977 1.003 B Std Error a Model (Constant) 695 398 Feature 048 074 Finance 080 Distance Facility Beta t Sig 1.748 082 -.035 -.641 054 077 483 053 331 Environment Occupation VIF a Dependent Variable: Decision Table 4.24: Coefficients of MLR including Income_Render Coefficients Unstandardized Coefficients Standardized Coefficients Collinearity Statistics Correlations Zeroorder Partial Part Tolerance 540 156 -.041 -.032 882 1.133 1.428 155 189 095 074 943 1.060 525 8.948 000 574 514 462 775 1.291 067 276 4.829 000 399 308 249 814 1.228 -.122 076 -.094 -1.605 110 214 -.107 -.083 783 1.277 -.144 120 -.062 -1.200 231 -.089 -.080 -.062 990 1.010 B Std Error a Model (Constant) 759 416 Feature -.047 076 Finance 079 Distance Facility Beta t Sig 1.824 069 -.039 -.613 055 076 482 054 322 Environment Income a Dependent Variable: Decision 87 VIF ... influencing on apartment purchase decision of customers in HCMC ?  How is impact of these factors on apartment purchase decision of customers evaluated in HCM context? Understanding relationship... especially in purchase of housing is a major goal of most people Firstly, price is one of important determinants of a household choice and buying decision However, unlike other consumption goods, the housing... decision to study key factors influence on The questionnaire consists of parts: socio-demographic; apartment preference pattern; apartment purchasing intention; factors influence on buying decision