Purchasing real estate is one of the most important and complex decisions in a life of an individual, which should take numerous factors into account. The purpose of this research is to identify which behavioral factors significantly affect the intention to buy real estate. Since the real estate market is continuously changing, along with other economic and life conditions, it is expected that different generations have different characteristics which affect their behavior; therefore, it is important to analyze generational influence on buyers' behavior.
A survey analysis was conducted on a sample of 434 respondents in Croatia. Partial least squares structural equation modeling was used to obtain the results. The moderating effect of generational affiliation was observed.
Overconfidence significantly affects intention to buy real estate, but it doesn't affect the level of importance individuals give to financial factors. On the other hand, herding significantly affects the level of importance given to financial factors, whereas it does not directly affect buying intention. A significant moderating effect of generational affiliation was found for the impact of overconfidence on financial factors, suggesting a negative effect for younger generations and a positive effect for older generations.
This research proposes a novel unique model with both behavioral and financial factors as predictors of the intention to buy real estate, together with generational differences in buyers' behavior. Understanding normal human behavior is crucial to determine how buyers' decisions and intentions change under the influence of certain biases or characteristics such as generational affiliation.
