Investigating Generation Z Preferences in Choosing Their First Home: Optimizing Rent-To-Own Housing Strategies For Bank BTN and Property Developers

Abstract

Background: Generation Z represents a significant emerging segment in the housing market. However, many younger individuals face barriers to homeownership due to affordability challenges and limited alignment between available housing products and their preferences. This issue is highlighted by the underperformance of the Rent-to-Own (RTO) Home Loan scheme launched by PT Bank Tabungan Negara (Persero) Tbk, which attracted only three customers out of a target of one thousand.
Purpose: This study aims to examine the housing preferences of Generation Z in selecting their first home and to provide strategic insights for aligning housing products with their needs.
Design/methodology/approach: The study employed a quantitative approach using conjoint analysis on primary data collected through structured questionnaires. Purposive sampling was applied to target Generation Z individuals aged 21–27 in the Jabodetabek area who had not yet owned a home. Conjoint analysis was selected because it enables the measurement of trade-offs across multiple housing attributes, allowing researchers to quantify the relative importance of financing methods, price ranges, locations, and housing types in shaping first-home preferences.
Finding/Result: The results indicate that Generation Z prioritizes cash payment methods, affordable house prices ranging from IDR 185–250 million, urban locations, landed housing types, and house sizes of approximately 45 m². These insights provide actionable guidance for PT Bank BTN and property developers, particularly in designing Rent-to-Own (RTO) schemes with flexible payment structures and offering affordable, compact landed houses in accessible urban areas to better align with Generation Z’s financial capacity and lifestyle preferences.
Conclusion: These preferences reflect the need for more tailored housing finance schemes and property offerings that realistically match Generation Z’s financial capacity and lifestyle expectations. The findings suggest that PT Bank BTN can enhance homeownership accessibility by introducing more flexible Rent-to-Own (RTO) structures, simplifying financing requirements, and offering clearer long-term cost transparency. Developers can also respond by producing affordable compact landed houses within strategic urban corridors that remain connected to key transportation networks. By aligning financing and product design with these insights, stakeholders can create more attainable pathways to homeownership for Generation Z.
Originality/value (State of the art): This study contributes new insights into Generation Z’s housing decisions in Indonesia using a structured analytical approach. Its relevance is heightened by Indonesia’s ongoing housing affordability challenges and the underperformance of existing schemes such as Rent-to-Own (RTO). By identifying the specific preferences and financial constraints of Generation Z an emerging yet underserved homebuyer segment this study offers evidence-based guidance for developing more responsive housing finance models and product designs that align with current market needs.

Keywords: conjoint analysis, generation z, home mortgage, housing preferences, rent-to-own