The Effect of Macroeconomic Environment and Hedonic Market on the Property Pricing Strategy
The Effect of Macroeconomic Environment and Hedonic Market on the Property Pricing Strategy

Summary/Abstract: The increase of prices for residential property is going through an annual increase (yoy). In the third quarter of 2017, residential property prices were estimated to grow by 3.99% (yoy), higher than 3.17% (yoy) in the second quarter of 2017. Based on the type of building, the highest increase in house price is expected to occur in small type of building (7,79% yoy). Property investment in West Java also experienced an increase as reflected in the rise of property price index in the third quarter of 2014. The strategy of property pricing is allegedly influenced by macroeconomic environment and hedonic market. Therefore, this study aims to examine the effect of macroeconomic environment and hedonic market on the property pricing strategy in West Java. The research was conducted by quantitative method. The unit of analysis and observation unit in this research is the customer of the property company in West Java. Observation conducted using time horizon which is cross section/one shoot that means information or data, collected directly at the scene, empirically at one time that is end of year 2017. The population is property companies in West Java, with sample taken as many as 50 respondents. Hypothesis testing is done by use Partial Least Square (PLS). The results show that the macroeconomic environment and hedonic market both influence the pricing strategy. The macroeconomic environment has a more dominant influence than the hedonic market in the formulation of pricing strategy. The results of this study are expected to provide benefits for property management companies in West Java that in the formulation of pricing strategies must consider the macroeconomic environment of population, household income, and interest rates. In addition, the pricing strategy should also consider the hedonic market aspect, especially the environmental and location aspects, physical structure, physical environment, and investment.

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