Does tightening lending policy put strains on the rental market? Evidence from Stockholm.

Abstract

With support from 6,288 observations of rental apartments in Stockholm, gathered from the Stockholm Housing Agency, this paper uses OLS regressions and theoretical frameworks to study and conclude that the implemented amortization financial stabilization policy, directed to the tenancy-owned market, has an indirect effect of increased demand for rental apartments in Stockholm. Furthermore, this paper also concludes that the amortization requirement is not the only variable describing the increased demand for rental apartments. Macro factors such as increasing- population and prices of tenancy-owned apartments, not controlled by the government, are also impacting and affecting the demand for rental apartments in Stockholm.