Consumer Preferences to Buy a House

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  • Topic: Real estate, Affordable housing, Public housing
  • Pages : 60 (18267 words )
  • Download(s) : 122
  • Published : December 17, 2012
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CHAPTER 1INTRODUCTION
1.0INTRODUCTION
The researcher has chosen to make a research on “Consumer Preferences to Buy a House at Kota Bharu, Kelantan”. The Researcher chooses this topic since it is become a serious issue when there are many units of houses build up by the housing developers cannot be sold in the market. It is important to identify consumer preferences to avoid from unsold houses. The introduction topic includes the background of study, problem statement, research objectives, theoretical framework, hypotheses, significance of this study, definition of terms and limitations of this study.

1.1BACKGROUND OF STUDY
There are various sectors that contribute to the economic growth of a country. Housing construction is one of the major contributors to the economic growth through the selling of the houses. In 2010, the construction sector's contribution to GDP was 5%. Although the contributions seem small in percentage terms, however, the actual total values of RM 18.2 billion, has generated significant economic linkages, and create multiplier effects on other economic sectors including financial services, banking, insurance, transportation and manufacturing sectors.

Country's housing sector also has a significant role for the realization of the Government's intention to achieve developed country status and income by the year 2020. In line with this objective, the Government through the Government's Transformation Plan (GTP) and National Key Result Areas (NKRA) has given special emphasis to enhance the low-income housing ownership in targeted areas of "Raising living standards of low-income households" and "Improving Rural Basic Infrastructure ". (Speech of Deputy Prime Minister during the Official Launching of the National Housing Policy, 10th February 2011)

Nowadays, the demands for houses at Malaysia are keep increasing, not only from local citizens but also from foreign investors. The demand is expected to increase in line with population increase, said Deputy President of the Housing Developers, and Property (Rehda), Datuk Michael KC Yam. He added that with the average demand in Malaysia of 150,000 units per year, based on population growth and household formation, it shows there are about 300,000 potential purchases of the waiting vessels. (Utusan Online, 1st December 2009)

Unfortunately, not all of the houses developed by the housing developers are able to be sold to the potential buyers. Some of the projects are abandoned because of the inability of the housing developers to sell the houses. Syarikat Perumahan Negera Berhad (SPNB) reveals there are about 8,000 residential units priced below RM 220,000 has offered in the market but yet be sold (http://www.bharian.com.my)

1.2 PROBLEM STATEMENT
Nowadays, the demand for houses is keep increasing. The Malaysian Property Market recorded an increase in property transaction with 340,240 transactions valued at RM 88.34 billion in 2008 compared to 309,455 in 2007, recording a 9% increase in term of units.

However, there are some differences in term of total units of house sold in this year. In 2010, there were about 7,982 units of houses have been sold, an increase of 21.6 percent from 6,563 units sold in the previous year. In the first quarter of 2011, the total property sales dropped by 36 percent to 1,033 units from 1,607 units in the same period last year. In the first quarter of 2011 also, there were just 6,109 new housing units launched in the market, a decrease of 52.3 percent from the previous quarter and 59.3 percent drop from the same period last year. (Valuation and Property Service Department)

In term of unsold residential properties, in 2004, the total of unsold residential properties until 31st December increased about 67.3 percent to 15,588 units worth RM 1.82 billion. The Deputy Finance Minister at that time, Datuk Dr. Ng Yen Yen said, this represent the increase of 6,258 units as compared to 9,300 unsold housed in...
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