Property investment decision-making behaviour amidst market disruptions: an institutional perspective

Abstract

PurposeDecision-making behaviour of property investors has been the focus of real estate research for decades. Yet, there is no consensus on a generally accepted behavioural model that suits all market conditions and investment peculiarities. While scholars have emphasized the significance of rational reasoning and cognitive influences on property investment decision-making preferences, gaps remain regarding the impacts of market disruptions on property investment decision-making behaviour. This paper, therefore, explores the institutional framework as a theoretical basis for understanding property investment decision-making behaviour amidst market disruptions.Design/methodology/approachThis paper reports a systematic review of pertinent theories that have explored decision-making behaviour. Commencing with an index search of high impact peer-reviewed journals, a snowball identification of relevant citations was also deployed to assemble theories from the field of psychology, sociology, economics and urban studies. Although a preliminary dataset of 82 papers with relevant decision-making theories was identified, the final dataset comprised 27 papers and 7 theories. The identified theories were reviewed accordingly.FindingsThe outcome of this study suggests that the institutional framework offers a robust approach to property investment decision-making amidst market disruptions, especially because it recognizes the dynamism in the investment environment and the roles of formal and informal rules that exist therein.Originality/valueThis study advances the current understanding of property investment decision-making behaviour by recognising the dynamism of the investment environment and how factors such as principles, laws, tradition and routines can lead to an established and legitimate standard of reasoning. By integrating both rational and cognitive attributes, the study provides a holistic perspective to property investors' decision-making behaviour in response to market disruptions.

Individual Cultural Values and Profit Expectations on Investment Intentions in Crypto Currency: Religiosity as a Moderating Variable

“…Koneva (2018) says that profit expectations and feelings will develop when people get to recognize the culture. However, Guilbaud (2012) said that culture is essential for relieving schizo-paranoid anxiety and regulating the relationship between fantastic objects (Bolomope et al, 2021).…”

Organizational Isomorphism and Property Investment Decision-Making Amidst Disruptions: Evidence From Listed Property Trusts in New Zealand

“…Indeed, the property investment environment is dynamic and imperfect (Waweru et al, 2014;Lowies et al, 2016;Bolomope et al, 2021), comprising of different actors, institutions and organizations with diverse but interrelated roles that constantly alter market information (Bruin & Flint-Hartle, 2003). However, irrespective of the viewpoints on property investment decision-making, the significance of the market formation, participants and regulations are critical in driving a holistic understanding of investment decisions across diverse market environments (Keogh & D' Arcy, 1999;Bolomope et al, 2021). Apart from the multi-complex nature of the property market arising from different actors, organizations and institutions, the property market is also exposed to various forms of disruptions that could significantly alter market information and projections.…”

“…"Since Christensen first introduced his conceptualization of disruption in 1992, the world has changed and so did the pace of disruption" (Nyu & Nilssen, 2020, p. 388). In the real estate sector, disruption has been linked to both anticipated and unanticipated events that could distort the predefined projection of market performance (Veuger, 2018;Bolomope et al, 2021). According to Kreimer et al (2003) and Cook (2015), demographic changes, globalization, advance in technology, political instability and environmental hazards are major forms of disruption that have continued to impact real estate investment and management.…”

“…kheim (1933), Weber (1947) and Parsons (1971), Meyer and Rowan (1977) argued that organizations incorporate and reflect the myths of their society in their quest for survival, through their obligations and routines. By evaluating the nature of interactions within and across organizations (Nee, 1998;Agboola, 2015), how behaviour emerges from various social, cultural and economic settings (Scott, 2005) and how they influence investment decisions in a complex environment (Keogh & D' Arcy, 1999), institutional theory advances the rational perception of organizational behaviour by establishing how beliefs, norms and routines are entrenched as the principles that guide organizational behaviour (Lecours, 2005;Bolomope et al, 2021). Institutional theory, therefore, suggests that organizations respond to the rules and norms that exist in their operational environment as they strive to attain significance, survival and legitimacy (Meyer & Rowan, 1977;North, 1990;Scott, 2013).…”

“…Institutional theory, therefore, suggests that organizations respond to the rules and norms that exist in their operational environment as they strive to attain significance, survival and legitimacy (Meyer & Rowan, 1977;North, 1990;Scott, 2013). The theory does not only explain why organisational structures and practices are established, it suggests how and why changes occur to the established behavioural pattern of organizations (Nee, 1998), especially as they respond to uncertainties (Bolomope et al, 2021). Institutionalism expands and integrates our understanding of the traditional property-investment decisionmaking process by recognizing both rational and nonrational attributes of property investors within an operating environment that is governed by formal and informal rules (North, 1990;DiMaggio & Powell, 1991).…”