| dc.description.abstract | This paper has tested for beta-convergence in real estate prices between Oslo’s boroughs
in the time period 1987-2015, and investigated which price determinants that affect price
movements between regions.
Both a graphical approach inspired by Baumol (1986), and a cross-region
regression method has been used. The study shows clear indications of absolute
convergence in periods with declining real estate prices, and absolute divergence in
periods with increasing real estate prices. This paper finds no evidence of long-term
absolute convergence or divergence. Oslo’s real estate market can be broken down into
three convergence groups based on structural differences and price movements. The first
group consists of the inner boroughs, the second group consists of the outer west
boroughs and Nordstrand, and the third group consists of the outer east boroughs.
The most important factors for price movements in the short run are migration
and debt gearing. In the long run, structural differences such as: unemployment rates,
education level, and geographical placements, appear to be the most important factors.
New construction appears to be the highest in areas with high growth, or areas with
potential for high price growth. Two boroughs with potential for future high growth in
real estate prices based on the evaluation of this paper are, Gamle Oslo and Nordstrand. | nb_NO |
