It makes sense then that the property which people own makes up a large portion of their wealth.
"This is especially true for many homeowners in the USA," says Adrian Goslett, CEO of RE/MAX of Southern Africa. He says that the average American has nearly one-third of their net worth tied up in real estate. "While not all South Africans own property, they want to. South Africa has been described as a nation which values property ownership above all other investments and sees it as an important part of their lifestyle."
In light of this, Goslett says that understanding consumer behaviour and other factors that drive property investment is central to any property transaction for both the buyer and seller.
He explains that buying behaviour is influenced largely by internal factors such as the motivation or need to acquire a property, the buyer's knowledge of property, personality and lifestyle requirements, all of which influence the decision process.
He refers to an excerpt from Principles of Marketing by Philip Kotler and Gary Amstrong that indicates the buyer decision process passes through five stages: need recognition; information search; evaluation of alternatives; purchase decision and post purchase behaviour.
"The process starts with the buyer recognising a need to own a property and then searching for housing information from several sources. The book mentions four groups of information sources: personal, commercial, public and experiential sources. The estate agent would form the commercial and public source of information, for example, while personal sources would be made up of family and friends. It stands to reason that information received from friends and family could be more convincing than the formal information received from the estate agent," says Goslett.
But, he says, even though...