About the author

1. Measuring potential resident’s and buyer’s attitudes towards non-existing residential developments using virtual reality technology Assistant Professor Berndt Lundgren, KTH, Stockholm, Sweden

2. Three research projects have contributed to the findings that are presented today. • Financing has been granted during 2005-2013 from the Swedish Research Council Formas. The Eurabuild programme and financing from ten private and public companies. • Courses at KTH: Market Analysis for Real Estate Development with a focus on housing and retail. PhD course in multivariate statistics. About the author Assistant Professor Berndt Lundgren Division of Real Estate and Construction Management The Royal Institute of Technology (KTH) Stockholm, Sweden

3. To show how we can bring the use of Virtual Reality (VR) animations a step further into analysis of potential demand. • To show how we can use structural equation modeling (SEM) and experimental designs to advice developers, architects and planners in how to improve design solutions for residential construction projects. • To show how we can identify effects of experiential factors on value-for-money conclusions and households intentions to buy. The purpose of this paper

4. Research question • Are households capable to evaluate perceived value from a VR-animation? • How do potential buyer’s react on price information when evaluating • perceived value from a VR-animation of a planned residential development? • Does a higher price affect their willingness to buy? Hypothesis • Therewill be significantdifferences in factorloadingsbetweenhouseholds that evaluate the project to market pricescompared to those who evaluate the project to market price + 25 percent. • A higher price will effect households intention to buy negatively when price increases

5. Residential choice behavior is determined by a set of heterogeneous preferences which mostly are unobservable factors as personal experience and values (Hoshino, 2012). • Experiential factors are pointed out as a key ingredient in the success of developing service offerings (Klaus, 2011). • Managing customer’s service experience has became a crucial strategic ingredient for service organizations (Klaus, 2012). Literature review • The means-end chain theory provides an explanation for the reasons behinf consumer’s decision making (Gutman, 1982; Olson & Reynolds, 1983). Lundgren, B. (2013) Customer-perceived value in residential developments: the case of Hornsberg Strand, Sweden, International Real Estate Review Vol. 16, (1).

6. The Kuttersmycket project at Östermälarstrand, Västerås, Sweden

7. The Kuttersmycket project at Östermälarstrand Kuttersmycket

8. A customerperceived value model(CPV) Urban Architecture Location (η1) Overall impression (η2) Customer perceived value (η3) Intentions

9. Measurement model: Families without children, market price , t-values(n=102), LISREL

11. Reliability and variance extracted Fornell & Larcker (1981). Hancock & Mueller (2001).

12. Group analysis: Families without children, market price, t-values, (n=102), LISREL

13. Group analysis: Families without children, market price + 25 %, t-values (n=138), LISREL

14. Evaluation of hypothesis Fully constrained model: Fully released model: Sign. difference: (P<0.01)

15. Evaluation of hypothesis • Households are capable to evaluate perceived value from a VR-animation. • Households react on price information when evaluating perceived value • from a VR-animation of a planned residential development. • A higher price affect households willingness to buy negatively.

16. Thank’s for your attention! Questions?