Purpose: The primary aim of this research is to examine the effects of the Renovation, Conversion, and Extension (ROT) tax deduction for renovations on the scope and quality of renovations and its subsequent impact on house prices across various Swedish municipalities. Design/methodology/approach: This study utilises a two-way fixed effect instrument variable (IV) spatial Manski approach, analysing balanced panel data from 2004 to 2020 at the municipal level (290 municipalities) in Sweden. The methodology is designed to assess the impact of the ROT subsidy on the housing market. Findings: The study reveals that the ROT subsidy has significantly influenced house prices, with noticeable variations between municipalities. These differences are attributed to the varying amounts of tax reductions for renovations and the extent to which property owners utilise these subsidies. Research limitations/implications: The research is limited to the context of Sweden and may not be generalisable to other countries with different housing and subsidy policies. The findings are crucial for understanding the specific impacts of government subsidies on the housing market within this context. Practical implications: For policymakers and stakeholders in the housing market, this study highlights the tangible effects of renovation subsidies on property values. It provides insights into how such financial incentives can shape the housing market dynamics. Social implications: The research underscores the role of government policies in potentially influencing equitable access to housing. It suggests that subsidies like ROT can have broader social implications, including the distribution of housing benefits among different income groups and regions. Originality/value: This study contributes original insights into the field of applied real estate economics by quantitatively analysing the impact of a specific government subsidy on the housing market. It offers a unique perspective on how fiscal policies can affect property values and renovation activities at the municipal level in Sweden.

New residential construction in many countries with rapid urban growth is often interrelated with smaller housing units being built. Sweden is not an exception. It is of interest to investigate the driving forces behind this tendency. Our presumption is that municipal land price policies and building permit regulations might play a certain role in this process. Contrary to previous studies that focus on the number of new dwelling units in housing construction, our purpose is to analyze the average size of new housing units and the factors that affect it on an aggregate level. We apply seemingly unrelated regressions for analysis of the average apartment size in new residential construction in the three largest metropolitan regions in Sweden as a function of the changes in population, apartment rent and prices, mortgage interest rates, land prices, and building permits per capita as a proxy for regulation. The unbalanced panel dataset includes the period between 1998 and 2017 and covers both the rental and the housing cooperative sectors. The analysis demonstrates that land prices and building policies along with market fundamentals are the underlying factors that affect the average size of an apartment in new residential construction in Sweden.

The impact of COVID-19 on various aspects of our life is evident. Proximity and close contact with individuals infected with the virus, and the extent of such contact, contribute to the intensity of the spread of the virus. Healthy and infected household members who both require sanctuary and quarantine space come into close and extended contact in housing. In other words, housing and living conditions can impact the health of occupants and the spread of COVID-19. This study investigates the relationship between housing characteristics and variations in the spread of COVID-19 per capita across Sweden's 290 municipalities. For this purpose, we have used the number of infected COVID-19 cases per capita during the pandemic period-February 2020 through April 2021-per municipality. The focus is on variables that measure housing and housing conditions in the municipalities. We use exploratory analysis and Principal Components Analysis to reduce highly correlated variables into a set of linearly uncorrelated variables. We then use the generated variables to estimate direct and indirect effects in a spatial regression analysis. The results indicate that housing and housing availability are important explanatory factors for the geographical spread of COVID-19. Overcrowding, availability, and quality are all critical explanatory factors.

Purpose: This study aims to measure the occurrence of gentrification and to relate gentrification with housing values. Design/methodology/approach: The authors have used Getis-Ord statistics to identify and quantify gentrification in different residential areas in a case study of Stockholm, Sweden. Gentrification will be measured in two dimensions, namely, income and population. In step two, this measure is included in a traditional hedonic pricing model where the intention is to explain future housing prices. Findings: The results indicate that the parameter estimate is statistically significant, suggesting that gentrification contributes to higher housing values in gentrified areas and near gentrified neighbourhoods. This latter possible spillover effect of house prices due to gentrification by income and population was similar in both the hedonic price and treatment effect models. According to the hedonic price model, proximity to the gentrified area increases housing value by around 6%–8%. The spillover effect on price distribution seems to be consistent and stable in gentrified areas. Originality/value: A few studies estimate the effect of gentrification on property values. Those studies focussed on analysing the impacts of gentrification in higher rents and increasing house prices within the gentrifying areas, not gentrification on property prices in neighbouring areas. Hence, one of the paper’s contributions is to bridge the gap in previous studies by measuring gentrification’s impact on neighbouring housing prices. 

Since the size of the homeownership ratio differs significantly between countries, it is important to understand the mechanisms that lie behind the decrease or growth of certain sectors of the housing market such as rentals and housing cooperatives. The aim of this study is to analyze the long-term dynamics of the new residential supply in Sweden's three largest cities for the period of 1990-2020 and estimate in what way market fundamentals affect it through new construction and housing conversions. We apply panel data methodology and, in distinction to previous research, consider the development of the housing market (urban growth) as physical volume. The results demonstrate that structural changes are driven mainly by fundamental demand factors and that the displacement effect occurs primarily in the market's rental sector and not in the owner-occupied segment. The apartment price per square meter, together with mortgage interest rates, are the major driving factors in the process of converting dwellings into housing cooperatives. Fundamental variables that affect new construction in both the rental and housing cooperative sectors are population and income growth. In the presence of a rent control environment, the rent or price level does not contribute to adding new units to the total housing stock.

The issue of schools and their capitalization in property values has been analyzed extensively. Our contribution is to analyze this effect in an alternative institutional context. In this case study, we analyzed the housing market in Stockholm, Sweden. What distinguishes the Swedish school system is that we have a free choice of schools, which means that a family does not necessarily have to live in a school district to access the schools in that area. This means that families do not have to move to the district to which they intend to send their children but can apply to send them there regardless of whether they live there or not. Nevertheless, families might be interested in living close to good schools to be within walking distance of these schools. This is especially true at the primary school level. Therefore, we analyzed schools' capitalization in property values in the context of free school choice. We used data on transaction prices for condominiums in Stockholm's inner city. The results indicate a capitalization of living close to good schools, but this capitalization is limited. We can show that schools' capitalization depends partly on the quality of the schools and partly on whether or not they are co-located with other externalities, such as green areas. The results also indicate that capitalization is affected by income differences within the city.

Who owns the city, and why is it important to know? The city constantly makes decisions that affect municipal residents regarding municipal services, land use, and financing. The cost is often linked directly to the municipal residents, but the benefits of some decisions directly affect the property owners and only indirectly affect the municipal residents. On the other hand, the property owners can be residents in the city or the country, but they can also be foreign property owners. Therefore, the distribution of costs will differ from the distribution of benefits. The study aims to investigate and analyse real estate owners in some focus areas in the Stockholm municipality in terms of nationality, patterns of real estate usage, area of properties, and the nature of ownership.

Purpose: The purpose of this study is to analyse the trends regarding housing segregation over the past 10–20 years and determine whether housing segregation has a spillover effect on neighbouring housing areas. Namely, the authors set out to determine whether proximity to a specific type of segregated housing market has a negative impact on nearby housing markets while proximity to another type of segregated market has a positive impact. Design/methodology/approach: For the purposes of this paper, the authors must combine information on segregation within a city with information on property values in the city. The authors have, therefore, used data on the income of the population and data on housing values taken from housing transactions. The case study used is the city of Stockholm, the capital of Sweden. The empirical analysis will be the estimation of the traditional hedonic pricing model. It will be estimated for the condominium market. Findings: The results indicate that segregation, when measured as income sorting, has increased over time in some of the housing markets. Its effects on housing values in neighbouring housing areas are significant and statistically significant. Research limitations/implications: A better understanding of the different potential spillover effects on housing prices in relation to the spatial distribution of various income groups would be beneficial in determining appropriate property assessment levels. In other words, awareness of this spillover effect could improve existing property assessment methods and provide local governments with extra information to make an informed decision on policies and services needed in different neighbourhoods. Practical implications: On housing prices emanating from proximity to segregated areas with high income differs from segregated areas with low income, policies that address socio-economic costs and benefits, as well as property assessment levels, should reflect this pronounced difference. On the property level, positive spillover on housing prices near high-income segregated areas will cause an increase in the number of higher income groups and exacerbate segregation based on income. Contrarily, negative spillover on housing prices near low-income areas might discourage high-income households from moving to a location near low-income segregated areas. Local government should be aware of these spillover effects on housing prices to ensure that policies intended to reduce socioeconomic segregation, such as residential and income segregation, produce desirable results. Social implications: Furthermore, a good estimation of these spillover effects on housing prices would allow local governments to carry out a cost–benefit analysis for policies intended to combat segregation and invest in deprived communities. Originality/value: The main contribution of this paper is to go beyond the traditional studies of segregation that mainly emphasise residential segregation based on income levels, i.e. low-income or high-income households. The authors have analysed the spillover effect of proximity to hot spots (high income) and cold spots (low income) on the housing values of nearby condominiums or single-family homes within segregated areas in Stockholm Municipality in 2013. 

Refugees fleeing conflict and oppression can affect the population size of cities within a country and neighboring countries. This paper examines how the rank-size rule of cities has changed in 28 countries located in volatile regions of Africa over the past four decades. We estimate two equation models explaining the relationship between spatial/temporal variation in cities and noneconomic factors. Although economic factors remain the principal determinants of urban growth, the prevailing rank-size patterns indicate that noneconomic factors such as armed conflicts are behind the development of most of these cities, particularly those near or bordering conflict areas.

Over the last decades, Sweden like most of the rest of Europe has experienced significant demographic changes due to aging population and influx of immigrants. Shifting composition of the population can be expected to affect housing construction in terms of housing tenure and total stock. While numerous studies have shown that there might be a dependence of demographic composition of the population and real estate construction, other studies have shown that this might be a result stemming from lack of control variables. This study sets out to analyze the relationship of demography and real estate construction, adding to the existing literature by differentiating between real estate construction in rental and owning sectors, as well as single- and multifamily sectors. We utilize a panel data set spanning from 1975 to 2005 that consists seven aggregated, self-contained regions of Sweden. Our preliminary findings suggest that the different estimates of the relationship between age categories of the population and housing construction is negligible. However, the difference in magnitude from younger persons between rental and non-rental multi-family housing construction is significant.