Dwellings in housing cooperatives constitute 15% of the Norwegian housing property market. The price paid for such dwellings consists of two elements: An equity price and a share of the mutual debt held by the cooperative. The interest rate paid on the housing cooperative's mutual debt is in Norway lower than the interest rate paid on private loans. This gives rise to an "interest discount effect". We find convincing empirical support for the interest discount effect, which contributes to a higher equity price for dwellings in housing cooperatives than for self-owned dwellings. On the other hand, we also find empirical support for a co-op discount of 9.3%. The co-op discount work in the direction of making cooperative dwellings more affordable.
We study the impact of improved road standards on housing prices in a region of Southern Norway, where towns are located along the coast, like pearls on a string, with sparsely populated areas between the towns. In this region towns have since long been linked together by a road, but in 2009 a new highway, roughly parallel to the old road, was opened. The new highway runs Eastwards from the main town in the region and reduced one-way commutes to the main town by 10-15 min. We examine how this change in transportation infrastructure has affected housing prices, using difference-indifference regressions to identify the impact of the new highway. Three smaller towns located East of the main town constitute the treatment region, while four towns and communities West of the main town form the control region. We find that the new highway on average increased housing prices in the treatment region by about 5%, but the effect on price differed substantially between the towns. The full impact on housing prices materialized when the new highway was opened. We estimate that the increase in total housing capital in the treatment region amounts to almost 84% of the construction costs of the new highway. Keywords Road investments. Infrastructure investments. Housing prices .
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