THE ESSENCE OF INVESTMENT DECISIONS IN REAL ESTATE
DOI:
https://doi.org/10.58898/ijmt.v4i2.23-31Keywords:
investment decisions, real estate, multi-criteria analysis, VIKOR, emerging markets, investor heterogeneityAbstract
The purpose of this article is to examine the essence of investment decisions in real estate by integrating theoretical foundations with behavioural factors. The relevance of the research is driven by the growing complexity of investment decision-making under conditions of information asymmetry, heterogeneous market participants, and the institutional specifics of emerging economies. The paper analyses classical financial indicators (NPV, IRR, PI, ROR) and highlights their limitations when behavioural biases are not considered. Using the VIKOR method with probabilistic linguistic term sets, the study demonstrates that changes in behavioural preferences may lead to a 2–4-fold shift in the evaluation of investment alternatives.
Key determinants of investment decisions are systematized, including rational and behavioural components, macroeconomic and institutional conditions, market segmentation, technological innovations, and investor typology. Special attention is given to the characteristics of the Balkan region, particularly Serbia, where data insufficiency and post-socialist institutional legacy create additional challenges for investment analysis.
The findings expand the theoretical understanding of behavioural influences in real estate investment and illustrate the importance of investor heterogeneity for project evaluation. From a practical perspective, the results indicate that investors, banks, and policymakers can improve project selection and credit risk assessment by integrating behavioural analysis with mul-ti-criteria decision-making tools such as VIKOR. The study is limited using hypothetical project data, methodological constraints of the VIKOR approach, and market-specific conditions. Nevertheless, the results provide a foundation for enhancing data trans-parency, strengthening institutional frameworks, and incorporating behavioural preferences into investment decision-making in emerging real estate markets.
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