ANALYZING RESIDENTIAL PROPERTY BUYING PATTERNS THROUGH BIG DATA ANALYTICS: A STUDY OF RATIONAL AND BEHAVIORAL DETERMINANTS

Abstract

The traditional models of property valuation primarily focus on such economic variables as income, location and price. Nonetheless, due to the emergence of big data analytics, the ability to analyze extensive consumer behavior, preferences and market dynamics in a more precise manner has become a reality. In this paper, the researcher is going to examine the buying pattern of residential property by combining rational determinants (income, affordability, location, interest rate) with behavioral determinants (emotions, social influence, risk perception). Through big data analysis tools, the study is able to manage and process structured and unstructured data utilized in the property listing, social networking and the search trend within the Internet. The results show that the element of economic rationality and the fallacy of action make an essential contribution to the decision-making process of purchasing properties that makes data-driven-modelling essential when analysing the housing market.

Purpose: To investigate the effect activity of rational reasons, prospect theory based behavioral reasons, and factor driven with heuristics on residential property purchasing decisions and determine which factors have the strongest influence on buyers in the real estate industry.

Design/Methodology/Approach: A descriptive research design has been adopted and a multistage sampling design was applied to sample the respondents comprising the current as well as the future residential property buyer. The survey employed a structured survey method in the collection of data, which yielded 450 valid results of the sampled residents in Guntur and Vijayawada. To investigate the impact of all the factors on making a purchase decision, the multiple Linear Regression analysis was conducted through R 3.5.

Findings: It demonstrates that rational ones are slightly more powerful in terms of the factor affecting the decision on the purchase of residential property. The behavior variables, though of medium influence also assist in decision making. The results are that raising awareness of influences on behavior can allow making more reasonable decisions by buyers and enhance the work of the market.

Practical Implications: The study helps the homebuyers in understanding the rational and behavioral determinants, hence powerful them to make better informed choices of residential properties. Such factors might also help real estate professionals to offer things that meet the tastes of the buyer.

Originality/Value: The research incorporates rational, behavioral, and heuristic concepts based on big data analysis to understand the residential property purchasing behaviour in a wholesome way, and provides the insight, which could be acted upon by both consumers and industry stakeholders.