The Effect of Local Economic Factors on Local House Prices

University essay from Handelshögskolan i Stockholm/Institutionen för finansiell ekonomi

Abstract: Local economic factors such as unemployment rate, housing per capita ratio and vacancy rate, along with national house prices, are all found to affect local house prices. This study shows that some of these factors produce different effects in large as opposed to small municipalities, with house prices in large municipalities in general being more sensitive to changes in these factors. Furthermore, the study investigates the effect of local negative shocks in the form of layoffs on local house prices. However, the study is unable to detect any significant effects.

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