The preferences of homebuyers with a negative outlook on the real estate market : Investigating the preferences of homebuyers in Stockholm

Abstract: The real estate market is constantly fluctuating and when the market slows down, it becomes more difficult to sell real estate. Because of this, it is of importance to construction companies to increase their understanding of homebuyer preferences in order for them to build condominiums that there is a demand for in a declining market, and thereby create a more liquid real estate market.  The aim of this thesis is to examine what the differences in preferences are between homebuyers who are positive and negative to the market development. To achieve this objective, three hypotheses were formulated regarding preferences of homebuyers with a negative outlook on the real estate market concerning location, size and functionality. Using a survey and questionnaire, data from potential homebuyers was collected at real estate viewings and via the internet. Once the respondents’ answers were collected, a principal component analysis was performed in order to find out how the different statements correlated with each other. After removing the statements that did not load correctly, three dimensions clearly corresponded to each of the three hypotheses. Testing the internal reliability for the three dimensions resulted in low values for dimensions 2 and 3, referring to size and functionality. However, internal reliability was good for dimension 1 referring to location. Performing an independent t-test on homebuyers with a positive and respective negative outlook on the market development showed no significant results for our hypotheses. The null-hypothesis is thus not rejected, meaning that for this sample, there are no significant differences in preferences of homebuyers with a positive and negative market outlook regarding location, size or functionality of their housing.