Macroeconomic effects on securitized real estate markets - A comparative study of Sweden and Switzerland

Abstract: This thesis investigates to what extent macroeconomic factors influence real estate stock prices before and after the outbreak of the financial crisis in 2007. This is carried out by examining the securitized real estate markets in Sweden and Switzerland by using descriptive statistics. Bivariate regressions are conducted for the macroeconomic factors; all share stock index, exchange rates, unemployment, inflation, term structure, money supply and real GDP per capita, to examine the marginal effect of each variable. The indexed developments and volatilities of each variable and correlations to the OMXS Real Estate and WUPIX-A are compiled to further facilitate an analysis. The results show that the macroeconomic effects on real estate stock prices differ among small economies and are inconsistent in a pre-crisis and crisis period. Solely theoretical aspects are not sufficient to describe the varying conditions in the financial markets, which have to be scrutinized in a wider economic context. Those factors that show some regularity in the relation to the real estate markets are all share indices, term structure and real GDP per capita.