The Ripple Effect: Analyzing Price Dynamics in Norway’s Housing Market

Abstract

This thesis investigates the relationships between the metropolitan housing markets in Norway, with a focus on potential lead-lag dynamics and the ripple effect of house price changes originating in Oslo. Using quarterly house price index data from Eiendom Norge for the period 2003 to 2023, the analysis applies econometric techniques such as Autoregressive Distributed Lag (ARDL) bounds cointegration and Toda-Yamamoto Granger causality (TY-GC) tests. Cointegration analysis identifies long-term equilibrium relationships in house prices, while Granger causality tests reveal predictive links between Oslo and other metropolitan areas. Furthermore, the OBX stock market index is included to evaluate its role as a larger economic indicator that influences the dynamics of the housing market. All analyzes were performed using STATA statistical software.