House price variations in Swedish regions : A panel study of house price determinants and their importance on house prices across Swedish regions

Sammanfattning: The Swedish housing market has been a vastly discussed topic over the past decades due to the sharp increase in house prices. Research in the past has discussed the Swedish real estate market along with its determinants and causes, but the regional perspective of the housing market has gained less attention. In this thesis we scrutinize the Swedish housing market and its determinants with the help of a panel data set. The Swedish municipalities have been categorized into three different regions; big city, dense and rural based on their characteristics to be able to make a comparison between similar municipalities without comparing each individual municipality. A GLS estimation is used to compare these three different regions against each other in order to draw conclusions about where certain economic variables are more or less important for determining house prices. We conclude that the researched variables do vary around the country in what significance and amplitude they have on the house price levels. Furthermore, we were able to show that monetary variables have a larger influence in big city and dense regions whilst demographical and geographical variables are more important for determining house prices in rural regions.