Is Covid-19 Affecting Swedish Real Estate Companies? : An event study approach performed with announcements from the Swedish Government and the Public Health Authority

Abstract: Background: The Covid-19 pandemic has been affecting the world in some or another way both when it comes to individuals and the adaption to a new lifestyle as well as economic and financial impacts on the global markets. The outbreak started off in China in the late 2019 and spread across every country in the world within three to four months. Living and working standards has since then changed due to restrictions with more people working from home and with impacts on the daily business of companies. The attention is brought upon the real estate sector because of the uncertainty followed by the new norms in societies which makes it an interesting sector on which to study the financial impact. Purpose: This paper aims to investigate how 13 chosen dates regarding the Covid-19 pandemic from announcements of the Swedish Prime Minister, Stefan Löfven and The Public Health Authority has affected the real estate sector in Sweden by using an event study approach. The dates were divided into three categories namely restrictions, work from home and financial support to see whether these specific announcements have a financial impact on Swedish real estate companies. Method: For this study, a deductive approach was applied along with the philosophy of positivism since this is most suitable for quantitative methods.  The event study methodology was used in order to observe the data on how the stock market in Sweden reacts on the impact of the outbreak concerning Covid-19 and how this might affect the real estate sector with the selected dates from the announcements. Conclusion: The findings from this study indicated that there were two significant results when calculating the abnormal returns for each individual company over all event dates with all others being not significant, since all other t-tests that were applied did not show strong enough results to provide significance concerning the real estate sector and the effects of Covid-19. Although, one should keep in mind that this is a short-term analysis and that in the long-term these results might differentiate, therefore, this thesis could be a guideline for future research when more data and information concerning the pandemic is available.