Do loan-to-value requirements matter for local house prices in Norway?
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- Master of Science 
In this thesis we look at the effect of loan-to-value (LTV) requirements on the Norwegian housing market during 2010-2013. We test how and to what extend this macroprudential policy would affect local areas with typically many first-time buyers, relative to areas with fewer first-time buyers. The data consists of house price information on Oslo and Bærum, Bergen, Stavanger and Trondheim, with their surrounding municipalities. The research is conducted using a flexible difference-in-differences model. We conclude that house prices relatively increased in areas with a high share of first-time buyers, compared to areas with a low share of first-time buyers, following the 2010 LTV regulation. The thesis will present two possible explanations for this relative price increase, which will be presented in the discussion. Using theory that links credit, leverage regulation and house prices. We conclude that the reallocation of demand of first-time buyers, is the reason for the observed relative price increase in local housing markets with a high share of first-time buyers versus a low share of first-time buyers.
Masteroppgave(MSc) in Master of Science in Business, Economics/Masteroppgave(MSc) in Master of Business - Handelshøyskolen BI, 2022