Behavioural Aspects and Value-Perception Dimensions in Hong Kong Luxury Residential Market

Abstract

Purchase of residential property is popular in Chinese society and a certain number of Hong Kong residents own and seek for their homes. Many property developers serve the market and some are focused on luxury residential development in different areas. As the market evolves developers focused on the lucrative luxury end have to be aware of the key determinants that affect homebuyers in choosing luxury residential properties. However, until now, relatively little research has measured consumer value perceptions and buying behaviour for luxury properties. The literature analysing luxury categories such as handbags, clothing, jewellery and cars deals with various factors that affect perceived value; consumers who pursue expensive high quality products typically want to display their wealth, style, and status to their social circle. But do the same motivations pertain to durable luxury residential properties? Will homebuyers have the same thoughts and behaviours as for other luxury items? This is a clear empirical and theoretical gap in our knowledge of luxury consumption. In this research, participating homebuyers were asked to express their opinions, attitudes and also their personal experiences of luxury products to address the key question of how perceived values (antecedents) influence purchase intentions (behaviour). Responses were analysed in the context of a conceptual model that included the relevant perceived values and effects toward preferences and choices with the objective of elucidating homebuyers’ value-perceptions and purchase intentions. The model was calibrated on 200 survey participants to analyse the relationship between Functional Effects, Interpersonal Effects, Personal Effects, Investing Effects and Convergence of Perceived Effects (the Independent Variables) and the Purchase Intention (the Dependent Variable). The results reflect the extent to which Purchase Intention is affected by four key variables - Functional, Interpersonal, Personal and Investing effects. In addition, purchase intention can also be aligned with the 5th independent variable – the Convergence of Perceived effects. Each outcome of each independent variable and the integrated sum of variable (Convergence of Perceived Value) shows a strong correlation with the dependent variable. This research described the economic, social, personal and cultural factors with support from appropriate secondary data that aligned with the investigation model. The results contribute new findings about the importance of Perceived Values and Effects to homebuyers’ behavioural intentions. The managerial implications are 1) the consumer market for Hong Kong luxury property can be usefully segmented along psychological lines, 2) the relevant social norms of Hong Kong conspicuous consumers help developers to identify relevant positioning strategies to capitalize on the exceptional demands of this group, and 3) there are big positive effects of meeting customer expectations in the property selection process. The study also identifies some limitations, and poses questions for further investigation on additional variables which can be explored in future.