Household Indebtedness in the Small House Market : Regional Sensitivity Analysis of Sweden

Sammanfattning: Recently the small house market has been extensively discussed by the market participants and media. Whether the small house owners afford to occupy their current house due to any market changes, especially after the Central Bank announced an increase in the interest rate during 2007. The purpose of this thesis is to analyse Sweden’s future economic development from a small house owner perspective and also to examine all the municipalities in the Sweden. The regional analysis is implemented in order to find the most sensitive municipalities in regard to any market changes. In the analysis, ratios have been used for describing the municipalities’ indebtedness and their ability of mortgage repayment. Interesting findings show that the most sensitive municipalities are situated in Skåne, implying that this region is the most sensitive to market fluctuations. There where also a strong indication of summer vacation resorts being highly sensitive, and these resorts where in addition located in Skåne. Furthermore, the future state of Sweden’s economy has an additional uncertainty due to new regulations by the newly elected government. The core conclusion is that statistics confirms that Skåne region is the most sensitive region, and this may escalate to reach national level.