Identifying the drivers behind housing preferences of first time owners

Purpose – The purpose of this paper is to provide a rare insight into the motivation behind first-time buyers when looking to purchase their first home. The factors driving demand preferences for detached housing are constantly changing and difficult to measure, and often deemed to be a complex bundle of attributes.

Design/methodology/approach – The research in this paper is based on interviews with purchasers at a series of locations across Melbourne, Australia, who were actively seeking to purchase a home for the first time. The data were analysed using factor analysis to identify the core decision criteria in a new house that were most sought after.

Findings – The findings in this paper confirmed that “financial” issues accounted for approximately 30 percent of the actual decision by first-time buyers to purchase housing, where decisions relating to the timing and choice of housing are dependent on “site-specific” factors.

Research limitations/implications – The research in this paper is aimed specifically at first time buyers only and the influencing factors behind their purchasing decisions.

Practical implications – The paper shows that, if consideration is given to the characteristics that first-time owners are looking for, providers of new housing would be better equipped to meet this demand and maximise construction efficiency.

Originality/value – In the paper the emphasis was placed on identifying and analysing the decision criteria behind first-time buyers, which provided an invaluable insight into their concept of a suitable residence. Rather than analysing sales transactions after they have been completed, this research considers aspects of new houses that first-time owners are actively searching for, prior to making their purchase.

The older generation and the housing market

This paper identifies and analyses the influence of older households upon the detached housing market in Brisbane.

The cyclical nature of residential housing markets

Cycles are an integral part of most capitalist societies. They are openly acknowledged and researched in certain real estate segments, such as the commercial office market. Although the 'seven year cycle' is often discussed in regards to residential real estate, there has been relatively little research undertaken in this area. Therefore this paper seeks to fill this void by commencing an investigation into residential housing market cycles. It commences with an overview of established theories in cycle research. An analysis of a large number of Brisbane suburbs over an extended time period was then undertaken using Fourier Analysis. The results suggested cycles were observed in a number of Brisbane suburbs, with consideration also given to differences in spatial patterns and property values.

Understanding residential house prices : examining the contribution of social area analysis

A complete understanding of residential housing markets, particularly in relation to variations in house prices both within and between suburbs, continues to present challenges to property researchers and forecasters. Factors affecting changes in housing demand are not yet completely understood, and accordingly market changes cannot always be confidently predicted. Most urban cities contain precincts that have high or low house values at the same time, regardless of characteristics such as distance to the city centre, location of transport or topography. Exactly why these variations in suburb values occur is often unclear, although local residents are able to easily identify differences between the status of each suburb, especially when one area is clearly perceived as superior to another. Consequently, houses in premium suburbs are sold for substantially more than houses in other areas, primarily due to this perceived higher demand. An understanding of reasons behind varying levels of buyer demand has always been difficult to fully encapsulate in housing studies, even though clear links have been observed between housing affordability and the type of inhabitant that would live in a particular area. This study confirms that traditional economic indicators can not always observe the degree of purchaser and vendor willingness in the residential property market, as per the International Valuation Standards Committee definition of market value, and substantial consideration must also be given to characteristics of individual buyers and sellers within the marketplace. No longer can the focus be narrowly focussed just on endogenous factors such as interest rates and inflation levels.
Accordingly, this research draws the disciplines of demography and housing research closer together and looks to social indicators for an insight into the level of house prices. To establish this link, a two-stage process is adopted where social area analysis initially identifies the characteristics of suburbs within an urban area. This information is then used to examine variations in suburb values, resulting in a clearer understanding of the relationship between demographic variables and house prices. This research analysed changes in the value of established residential house prices in Melbourne, Australia as well as the relationship with social structure. The added dimension of time highlighted change, with data drawn from 1996 and 2001. The results confirmed the existence of strong linkages between social constructs and established house prices. Whilst acknowledging that the overall level of house values is influenced by external economic and political factors, differences between suburb values can be explained by demographic variables. The results confirm that increased emphasis must be placed upon demography when seeking to understand variations in residential property values between urban areas.

Residential housing and the green agenda

Australia’s residential development industry is at least superficially embracing environmental and sustainability issues in urban design. Rapidly emerging use of recycled water, lower impact outfalls, the use of roof water and water sensitive design for both housing and landscapes are all trends of interest to the property profession. There is particular interest in the cost of meeting end-user, local Government, State Government and development industry expectations for a green agenda for the residential sector.

The relationship between sustainability and housing value

Sustainability has rapidly become one of the most important issues in wider society, where recent attention has been focused on sustainable practices in the built environment such as the design, construction and operation of new buildings. Although detached houses are one of the largest land uses in the built environment, it is surprising that relatively little research has been conducted into the implementation and demand for sustainability. Even though the technology exists for increasing sustainability in housing, it appears that little attention has been given to the added value that sustainability can give to a property.

This paper discusses recent developments in sustainability with regards to housing. It identifies and groups the various options available to a housing owner, although the focus is placed on how much the sustainable features add (or detract) from the value of the home. Consideration is given to the existing valuation methods that are used to assess the value of a residential property and also the ease of implementation.