A Statistical Study of How Different Factors and the Availability of High-Speed Internet Affect Housing Prices

Abstract: This paper presents an empirical study of the impact of different factors on real estate sales prices in the countryside of Sweden. Further, this thesis analyzes the value of broadband to Swedish households examining whether access to fiber is correlated with higher real estate sales prices. The research goal was to find what three factors that affect the sales price the most and further to determine whether consumers in Sweden are willing to pay more money for real estates located in areas where fiber broadband access is available, than for a property that does not offer this amenity. Using data collected from real estate sales during 2015 achieved from Valueguard and information regarding broadband access from The Swedish Post and Telecom Authority, a hedonic pricing model in real estate economics was applied. In order to evaluate how different factors influence real estate prices, sales statistics was analyzed through the mathematical method of multiple linear regression. One conclusion drawn from this thesis is that it is possible to explain approximately 66 % of the price of a single-family residential located in the Swedish countryside. The value of a property in the countryside is most dependent of where it is located, both in terms of municipality and also of how central and close to water it is situated within a smaller community. Results from this thesis also suggest that fiber availability may indeed have a positive effect on real estate prices, increasing them with 2.8% - 12%, as the presence of fiber-based broadband in a neighborhood area is increasing.