The Effect of Behavioral Changes from Generation Y During Pandemic on Indonesian Housing Prices Growth

Abstract

During the COVID-19 Pandemic, the stagnant and even a declining growth of Indonesia residential property prices has become a popular issue and drawn the researcher’s attention about the details behind it, as in terms of buying preferences, changes due COVID-19 and solutions for the problem. The purpose of this study is to comprehend the effect of behavioural changes from Indonesian Generation Y during pandemic on housing price growth. Generation Y referred to in this study are Indonesian citizens born between 1991 to 1998 or early 2000 (Junior Gen Y) and between 1980 to 1990 (Senior Gen Y) who dominate Indonesia's population and also have a massive influence on GDP. COVID-19 forced a change in consumer behaviour which further leads to prioritize the most basic needs. This also brings changes to the effect of buyer preferences on house prices during the pandemic. This study also explains Generation Y's preferences in buying houses in order to understand which preferences will affect demand and house prices because it will also help several parties involved in housing transactions construct strategies to make the property more appealing to buy. The data used in this study is collected using quantitative methods by online survey with the total of respondents 219 limited to Generation Y who have a fixed income every month and are willing to own a house in Depok. The data is further processed using PLS-SEM analysis. The study found that COVID-19 has a negative effect on house prices through buyer preferences, particularly on dwellers characteristics. It is also found that Generation Y's preferences are still the same, but some things that are considered more important with the most important supplemental factors are then followed by future considerations, dwellers characteristics and product specifications. From these findings, recommendations for related parties are also given in the last part of this study.