Dynamics of subletting: Evidence from Swedish university students

Abstract

Groups with more transient accommodation needs, such as students and expatriates, are increasingly turning to long-term rental sublets to satisfy their demand. We empirically analyze seasonality and market dynamics of such a market in the context of university admissions in Sweden. We find no difference in rents during the first half of the calendar year in student cities, followed by a sharp increase in August that stays persistent throughout the year. Student city listing density increases until May but is completely offset by September. During the subsequent 8 weeks following the university admission period, rents grow between 4.6 and 5.4 percent on average, while a one percentage point increase in the ratio of student net movement to population is associated with an increase in rent between 0.77 and 0.98 percent. Using a more robust subsample, we find that daily listing density in student cities decreases by 29.6 percent relative to non-student cities in the week immediately following the admission periods.