| 1. |
- Engerstam, Sviatlana, 1974-, et al.
(författare)
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Exploring the Effects of Municipal Land and Building Policies on Apartment Size in New Residential Construction in Sweden
- 2023
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Ingår i: Journal of Risk and Financial Management. - : MDPI. - 1911-8074. ; 16:4, s. 220-220
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Tidskriftsartikel (refereegranskat)abstract
- 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.
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| 2. |
- Engerstam, Sviatlana, 1974-
(författare)
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Fundamental determinants of house prices in advanced economies:A systematic literature review.
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Despite the extensive international interest in house price dynamics and the growing body of research in this area, until now it was not that evident what the fundamental factors are that determine house prices and what the size of their potential impact is on house price dynamics over the long run.This study provides a systematic literature review of empirical studies on the fundamental determinants of house prices in advanced economies at the aggregated level. It is based on analysis of journal articles published in 58 top-tier housing, urban and real estate journals using bibliometric analysis. The synthesis on house price determinants involves 66 selected studies published in English during the last five decades (1973-2022) and represents a summary of the developments in the field of housing economics related to house price dynamics.The results of the study suggest that most of the research on house price determinants employed quantitative methodology with a wide variety of econometric techniques. The study presents several key findings related to house price dynamics over the long run. Particularly, it defines fundamental determinants of house prices, classifies them in relation to the size of their elasticities and emphasizes the differences between them. In addition, the study describes the role of data sources as well as quality and modelling techniques, and discusses the impact of inflation, momentum, mean reversion and housing market efficiency. The study ends by assessing the outlook for potential extensions of the existing literature and outlines further research areas.
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| 3. |
- Engerstam, Sviatlana, 1974-
(författare)
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Housing Market Dynamics
- 2023
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- The dynamics of housing markets constitute a complex phenomenon. The body of research is vast and includes thousands of studies done on the national and international level. Empirical evidence indicates that housing markets differ in local institutional arrangements and that these might affect the ways they develop over time. To analyze housing market dynamics in various institutional environments and to increase our understanding of them is the main objective of this thesis.The scope of research includes analysis of relevant theories and empirical models that might explain development of house prices over the long run. Given that prices affect housing construction, this thesis also aims to deepen understanding of the impact of the relationship between new construction and underlying fundamentals, together with various institutional arrangements that might differ between countries. In particular, they include bank lending policies, valuation methods for mortgage purposes, different regulatory measures like rent control, as well as land and building policies.The Swedish apartment market was chosen for empirical analysis. The analysis is carried out by a combination of qualitative and quantitative methodology and applies several research methods, such as systematic literature review, and panel data analysis with application of advanced econometric techniques like Dynamic Ordinary Least Squares, Fixed and Random Effects and Seemingly Unrelated Regressions. Four studies are carried out using these methodologies.The results indicate that the interest rate, disposable income and population growth seem to be major determinants of house prices according to studies found in the empirical literature (Paper 1). The study also classifies house price determinants in relation to the size of their elasticities. However, fundamental factors cannot always provide an explanation for the deviations in house price dynamics in different countries, whereas the institutional environment might do so (Paper 2). The analysis demonstrates that land prices and building policies, along with a number of market fundamentals, affect the average size of an apartment in new residential construction (Paper 3). In the presence of rent control, the rent or price level does not contribute by adding new units to the total housing stock. In addition, the displacement effect occurs primarily in the market’s rental sector and not in the tenant-owned apartments segment (Paper 4).This research contributes to a better understanding of housing markets dynamics and suggests policy implications that might reduce the risks for housing bubbles and improve the socio-economic development of the society over the long run.
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| 4. |
- Engerstam, Sviatlana, et al.
(författare)
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Is smaller housing size a consequence of land price policies and building permit regulations?
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- We can observe a trend of smaller housing units in new residential construction in many countries with rapid urban growth. It is of interest to recognize the driving forces that are behind this trend because if it sustains in the long run, as both positive and negative consequences for sustainable development of the housing market can be expected. Therefore, the purpose of this paper is to examine the main underlying factors affecting the average size of apartments in new construction in metropolitan areas in Sweden. Panel data methodology applied in the analysis. The model uses the average size of an apartment in new housing construction as a function of the changes in the population, apartment prices, mortgage interest rates, rents, land prices, building permits per capita. We estimate the interrelationship between apartment size and these variables through simultaneous equation models. The data covers both the rental and the cooperative housing sectors over 24-28 years depending on availability of variables. The analysis demonstrates that the land values and building policies, along with market fundamentals, are the underlying factors that affect the average size of an apartment in new residential construction. Opposite to previous studies that focus on explaining the number of new housing, we analyze the average size of new housing units and factors that affect it on an aggregated level.
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| 5. |
- Engerstam, Sviatlana, 1974-
(författare)
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Long run apartment price dynamics in Swedish and German cities
- 2021
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Ingår i: Journal of European Real Estate Research. - : Emerald Group Publishing Limited. - 1753-9269 .- 1753-9277. ; 14:3, s. 309-330
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Tidskriftsartikel (refereegranskat)abstract
- Purpose: This study examines the long term effects of macroeconomic fundamentals on apartment price dynamics in major metropolitan areas in Sweden and Germany. Design/methodology/approach: The main approach is panel cointegration analysis that allows to overcome certain data restrictions such as spatial heterogeneity, cross-sectional dependence, and non-stationary, but cointegrated data. The Swedish dataset includes three cities over a period of 23 years, while the German dataset includes seven cities for 29 years. Analysis of apartment price dynamics include population, disposable income, mortgage interest rate, and apartment stock as underlying macroeconomic variables in the model. Findings: The empirical results indicate that apartment prices react more strongly on changes in fundamental factors in major Swedish cities than in German ones despite quite similar development of these macroeconomic variables in the long run in both countries. On one hand, overreactions in apartment price dynamics might be considered as the evidence of the price bubble building in Sweden. On the other hand, these two countries differ in institutional arrangements of the housing markets, and these differences might contribute to the size of apartment price elasticities from changes in fundamentals. These arrangements include various banking sector policies, such as mortgage financing and valuation approaches, as well as different government regulations of the housing market as, for example, rent control. Originality/value: In distinction to the previous studies carried out on Swedish and German data for single-family houses, this study focuses on the apartment segment of the market and examines apartment price elasticities from a long term perspective. In addition, the results from this study highlight the differences between the two countries at the city level in an integrated long run equilibrium framework.
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| 6. |
- Engerstam, Sviatlana, et al.
(författare)
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Long-Term Dynamics of New Residential Supply : A Case Study of the Apartment Segment in Sweden
- 2022
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Ingår i: Buildings. - : MDPI AG. - 2075-5309. ; 12:7, s. 970-
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Tidskriftsartikel (refereegranskat)abstract
- 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.
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| 7. |
- Engerstam, Sviatlana, et al.
(författare)
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Long-term dynamics of new residential supply: A case study of the apartment segment in Sweden
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Since the size of the homeownership ratio differs significantly between countries, it is important to understand the mechanisms that lie behind decrease or growth of certain sectors of the housing market like 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.
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| 8. |
- Engerstam, Sviatlana
(författare)
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Macroeconomic determinants of apartment prices in Swedish and German cities
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- We study the long-term effects of macroeconomic fundamentals on apartment prices in major urban areas in Sweden and Germany. The panel cointegration analysis was chosen as the primary approach due to the limited availability of data for a more extended period and frequency. The dataset consists of 2 countries – Germany and Sweden. The Swedish dataset includes three major cities and a period of 23 years, while the German dataset includes 7 “Big cities” for 29 years. Pooling the observations allows overcoming data restrictions in econometric analysis of long-term time series such as spatial heterogeneity, cross-sectional dependence and non-stationary, but cointegrated data. The results lie in line with previous studies and also allow comparison of single city estimations in an integrated equilibrium framework. The empirical results indicate that apartment prices react much stronger on changes in fundamentals in major Swedish cities than in German ones despite quite similar underlying fundamentals. Comparative analysis of regulations on the rental market, bank lending policies, and approaches to valuation for mortgage purposes in these two countries provide evidence that this overreaction arises due to institutional differences in form bank lending policies, mortgage valuation practices, and regulations on the rental market. Application of the more sustainable value concept such as mortgage lending value in mortgage valuations could make lending for housing less procyclical and stabilize house prices over the long run. Moreover, it will help to keep house prices away from overreaction on changes in macroeconomic fundamentals.
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