Market Rents in Stockholm - An Estimation of Market Rents using Queuing time
Sammanfattning: The aim of this thesis is to use queuing time as an indication of demand to estimate market rents in Stockholm. This is done by presenting rent dynamics in the Stockholm area, conducting an OLS (Ordinary Least Square) regression and creating a proxy for market rents for each specific apartment in a comprehensive data set, consisting of all mediated apartments by the Stockholm Housing Service during the period 2009 to 2013. The estimated market rents are further compared to the current rent levels and user costs in tenant-owned dwellings at area and district levels. This is complemented with different market participants' opinions regarding the complex issues of the housing market. The main finding of the thesis is that the estimated market rents are on average 92 percent higher than current rent levels. The results reveal that a number of factors affect demand for rental housing and households' tenure decisions, i.e. area attractiveness, travel time, income levels and the relative cost of owning versus renting, where the most important factor is area attractiveness. Finally we find that the estimated market rents are higher than current user costs in tenant-owned dwellings, mainly due to the low interest rate environment. Additionally, different demand patterns are reflected both in the estimation of market rents and user costs, which vary depending on location.
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