Homebuyers’ Green Features Preferences and Willingness To Pay: Evidence From Penang, Malaysia

Purpose – This paper aims to determine the green features that homebuyers in Penang consider for their green building choice, as well as to investigate the price premium that prospective homebuyers are willing to pay for green buildings as compared with normal buildings. Design/methodology/approach – This study used a quantitative approach. There are twelve green features identified and grouped under three independent variables namely energy efficiency, indoor environment quality and water efficiency. The survey was a cross-sectional study and a total of 120 valid responses were collected using a self-administered online survey questionnaire among Penangites in Malaysia. Multinomial logistic regressions were run using Stata 17.0 for the data analysis. Findings – The result shows that indoor environment quality is the major factor that will influence the home buyers’ willingness to pay for 11% to 29% green buildings’ price premium. Those features are natural ventilation design, sufficient daylighting, low-toxicity finishes and furnishing, and sound insulation design. Practical implication – The study provides insights for policymakers and developers to understand the needs for home buyers so that green buildings can be successfully launched and appreciated in the country. Originality – The understanding of the homebuyers’ green features and the range of willingness to pay for price premium may provide a guide to the developer in determining the design and price range for green building development.