Empirical evidence on the determinants of Selangor public housing rent to own purchase decision

Abstract

The Rent-to-Own scheme had been put into the limelight under the Budget 2015 by the previous Prime Minister. Rent-to-Own (RTO) scheme allow an individual to rent the property for a certain period of time, with an option to purchase the property at a pre-determined agreed sales price at the end of the rental period. Despite the initiative offered by the government to promote this scheme, it is not well received by the targeted group. This cross-sectional questionnaire survey study aims to identify the determinants affecting the Rent-to-Own scheme. The questionnaire survey was distributed to 118 respondents by adopted the Cochran’s equation where 90% of confidence level and level of precision of 8% were assumed for the equation. There are six determinants found affecting the decision to purchase of RTO housing scheme. The determinants are general determinant, financial determinant, income determinant, location determinant, building determinant, and accessibility determinant. The empirical analysis revealed that top-ranking determinant was the financial determinant. The result will be useful to the developers, homebuyers and policymaker regarding the vital determinants that need attention towards making this scheme benefited to the targeted group.