Bridging The Adoption Gap: An Extended TPB Analysis of Rent-To-Own Scheme Acceptance Among Young Homebuyers in Indonesia

Abstract

Housing affordability has become a major challenge for Generation Z and Millennials in Indonesia, as reflected in the growing preference for renting rather than owning homes. This study examined the factors influencing the adoption of the Rent-to-Own (RTO) housing scheme by extending the Theory of Planned Behavior (TPB) framework with four additional constructs: Perceived Affordability, Government and Institutional Support, Perceived Risk of RTO, and Perceived Usefulness of RTO. A mixed-method approach was employed, combining a quantitative survey analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with qualitative interviews involving property and finance experts. The findings revealed that Perceived Affordability, Government and Institutional Support, and Perceived Usefulness significantly and positively influenced Attitude Toward RTO, Perceived Behavioral Control, and Subjective Norms, while Perceived Risk had no significant effect on Attitude Toward RTO or Perceived Behavioral Control. Subjective Norms emerged as the strongest predictor of Behavioral Intention, followed by Perceived Behavioral Control and Attitude Toward RTO. The qualitative findings indicated that limited financial literacy, consumptive lifestyles, unclear regulatory frameworks, and insufficient institutional support remained key barriers to RTO adoption among young adults. Based on these findings, this study proposed three strategic solutions: establishing a comprehensive regulatory framework, developing financial education and literacy programs using the Value-Focused Thinking (VFT) approach, and implementing the Financial Education for Savings (FES) model to strengthen long-term financial planning. This study contributes to the extension of the TPB framework within the housing finance context and provides practical recommendations for policymakers, financial institutions, and property developers to enhance the adoption of RTO schemes in Indonesia.