Rich assets of minerals and renewable energy, along with a favorable climate have enabled an industry boom in Northern Sweden in the recent decade. One industrial investment that has received considerable attention is the establishment of a large battery factory in Skellefteå. The factory was announced in October 2017 and has led to a sharp increase not only in labor demand but also for housing in the area.
The aim with this study is to investigate if and how the industrial investment in Skellefteå has affected house prices in the municipality. Furthermore, the study aims to examine how the (potential) effect on house prices has developed over time and for what distances to the city center that the total price increase has been the largest. In the analysis a difference-in-difference approach is applied using transaction data from Svensk Mäklarstatistik AB. The data covers the period 2013–2022 and includes house sales made in Skellefteå and in a control group (Östersund). The empirical strategy is based on hedonic price theory where house prices are determined by specific house characteristics and location. Results suggest that the factory establishment in Skellefteå has had a positive effect on house prices in the municipality. Moreover, there is evidence that the impact of the industrial investment on house prices has increased successively over time. Lastly, descriptive analysis indicates that the largest total (percentage) price increases have occurred further away from the city center where the initial prices were relatively low.