On 13 June 2005, the Board of Directors of a renowned international property company decided to purchase a piece of land in Shanghai to develop a shopping mall. The main motivation for purchasing the land was to increase the company's presence in Shanghai despite the relatively low Net Present Value (NPV) and Internal Rate of Return (IRR) of real estate investment in China.

On the same day, a Singaporean family decided to purchase a condominium unit (The Sail @ Marina) for investment purposes. While one of the family members was signing the sales contract, another family member, who was spending an afternoon at her friend's condominium, was so attracted to its resort-style concept and impressed with the level of asset management that she felt she would not mind working a lifetime to finance the purchase of the dream home she had just seen.

The above scenarios depict varied decision-making processes by stakeholders in the real estate market. Unlike ordinary economic goods, real estate is often regarded as a tangible asset with a bundle of rights attached to it. It is also a more complex product due to its characteristics and operations of the real estate market. Thus, many professionals are involved in delivering goods and services in the real estate market. This also implies that there are complexities involved in the real estate development process. According to Ling and Archer (2005), the property development cycle involves eight main stages, namely:

1. establishing site control
2. feasibility analysis, refinement, and testing
3. obtaining permits
4. design
5. financing
6. construction
7. marketing and leasing
8. operations

The real estate development cycle takes on a systematic approach, involving inputs from various disciplines (e.g. geography, law, finance, management, marketing, economics). Among these, few key areas have been the main focus in real estate research and education. Black, Brown, Diaz, Gibler and Grissom (2003) mentioned that these inputs have somehow formed "artificial boundaries" (p. 85) on real estate research and education. Black et al., (2003) called for a more holistic approach to study real estate by linking the thoughts, theories and tools from other disciplines to real estate research and education. Black et al., (2003) further cited behavioural research as an area which real estate educators and professionals should develop, and claimed that all disciplines within the realms of real estate research and education "derive their existence from human behaviour" (p. 86). However, there has not been much research and understanding on behavioural perspectives in real estate research and education (Black et al., 2003; Levy & Henry, 2003). For example, if the assumptions of financial cash flows are derived from human decisions, then architects need to understand human behaviour and the built environment while real estate owners and managers should understand their stakeholders' attitudes and behaviour to enhance productivity.

In 2004, after attending the American Real Estate Society Conference in Florida, USA, I began examining the real estate courses offered by leading universities. It was then that I realised the apparent lack of coverage in behavioural aspects in real estate studies. The broad-based education system at NUS motivated me to develop the module RE33 90 "Behavioural Studies in Real Estate" as one of the electives of the Bachelor of Science (Real Estate) programme for Academic Year (AY) 2004/2005. Essentially, the module advocates that the perceptions, attitudes and behaviour of real estate players are the result of interaction among real estate, people and the environment. Therefore, it is critical that real estate professionals understand the complexities and dynamics of issues affecting the behaviour of real estate players during different stages of the real estate development cycle. This multi-disciplinary module looks at the different principles, concepts and methodologies of behavioural studies in real estate using real estate as a product and the real estate market as the background. The module adopts an interdisciplinary approach, hinging upon theories and applications from disciplines such as psychology, sociology and economics. The module comprises interactive lectures, on-site learning and workshops. Students will also have the opportunity to grasp first hand perspectives of real issues affecting the behaviour of real estate players.

I have completed the second run of the module in Semester 1 of AY 2005/2006. When the module was first introduced in AY 2004/2005, less than 20 students registered for it, but student numbers increased to 74 during its second run in AY 2005/2006. It was also during the second run that students had opportunities to experience better insights on the behavioural perspectives during property developments launches and asset management stages of property development. Students were also enthusiastic in producing good quality submissions. During the final examinations for the module, multimedia slides were used to enhance students' understanding of examination questions based on behavioural perspectives.

Focusing on behavioural studies will certainly widen the opportunities for real estate research and education. While adding further dimensions to existing theories from other disciplines, behavioural studies will also deepen students' understanding of real estate issues from the behavioural perspectives. This will ultimately enhance the real estate industry.

References

Black, R.; Brown, G.; Diaz, J.; Gibler, K. & Grissom, T. (2003). 'Behavioural Research in Real Estate: A Search for the Boundaries'. Journal of Real Estate Practice and Education. Vol. 6, No. 1, pp. 85-112.

Levy, D. & Henry, M. (2003). 'A Comparative Analysis of US, UK and Australian Published Property Research Methodologies and Methods'. Pacific Rim Property Research Journal. Vol. 9, No. 2, pp. 148-162.

Ling, D. & Archer, W. (2005). Real Estate Principles: A Value Approach. McGraw- Hill/Irwin, New York.