Regional Investment Drivers in Residential Construction : Impact of Population Growth, GDP Growth, and Interest Rates on Residential Construction Investments (2008-2023)

This thesis examines the regional factors influencing residential construction investments in Sweden from 2008 to 2023, focusing on the role of population growth, regional economic performance (GDP growth), and interest rates. Utilizing location theory as the main theory, together with land use theory, and the location choice model, all as the frame of reference in this study. The study uses quantitative methodology for the data analysis and employs correlation analysis, reliability testing (Cronbach’s alpha), and multiple linear regression to analyze data sourced from Statistics Sweden and Sveriges Riksbank. Findings showed that population growth and regional GDP significantly drive residential construction, explaining approximately 85% of the variation in housing activity across Swedish regions. Surprisingly, the central bank interest rate showed no statistically significant impact, likely due to construction companies transferring interest costs to homebuyers. This study highlights regional disparities, identifying metropolitan regions such as Stockholm, Västra Götaland, and Skåne as primary areas of investment. These insights provide valuable guidance for policymakers and real estate investors seeking to understand and capitalize on regional housing trends. Future research is recommended to explore additional influential factors like infrastructure development and regulatory conditions.