Behavioural Real Estate

40 Pages Posted: 4 Jul 2013 Last revised: 6 May 2016

See all articles by Diego A. Salzman

Diego A. Salzman

The Research Laboratory for Behavioral Finance

Remco C. J. Zwinkels

Vrije Universiteit Amsterdam; Tinbergen Institute

Date Written: July 3, 2013


All over the world there is a strong infatuation towards real estate. Nevertheless there seems to be a (sub)conscious omission in incorporating this stylised fact into the academic literature. The decision of buying residential property may be one of the most important transaction people will ever make, and the emotional attachment when houses become homes is inevitable. Can we effectively sustain that properties, houses, and homes are equivalent terms? It is fair to say that while its importance is undeniable, the consumption function as well as the social and emotional perspective of real estate are often neglected. The behavioural approach to decision making under uncertainty combines insights from psychology and sociology into real estate finance and investment. We aim to provide an overview of the current state of affairs of the main themes in which the behavioural approach intersects with real estate to gain a deeper understanding of the build environment. It seems to be the general agreement that behavioural studies can help to gain insight into property markets, but that a large component of behavioural decision making is left undiscovered.

Keywords: real estate markets, market participants, behavioural decision making

JEL Classification: G02, R31, R33

Suggested Citation

Salzman, Diego A. and Zwinkels, Remco C.J., Behavioural Real Estate (July 3, 2013). Journal of Real Estate Literature, Forthcoming, Available at SSRN: or

Diego A. Salzman

The Research Laboratory for Behavioral Finance

95 St Martin's Lane
London, wc2
United Kingdom

Remco C.J. Zwinkels (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, NL-1081HV
+31 20 59 85220 (Phone)


Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS

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