APARTMENT PRICES IN SWEDEN : An analysis of determinants of tenant-owned apartment prices

Real estate prices have during the last two decades seen a large increase. The increased prices together with more regulations of mortgages have created a market where it is difficult to enter. Moreover, a low rate of construction, resulting in a low supply of apartments have further created an exclusive market. To better understand the structure of the market, and to create a more inclusive market, this thesis has further looked at the pricing structure. This thesis uses two fixed effects models to determine which factors affect apartment prices in metropolitan regions of Sweden, i.e., Stockholm, Gothenburg and Malmö. A time period of 2005-2019 was researched, and 44 municipalities were included. Variables used in the model was population density, income, tax rate, unemployment rate, and mortgage rate. Results show that population density and income have a positive effect on apartment prices, while tax rate, mortgage rate and unemployment rate have a negative effect. The results are discussed in regard to supply and demand, which are the main drivers of the housing market