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Research article - Peer-reviewed, 2014

Factors Affecting Swedish Forest Property Prices

Carlsson, Sofia; Lönnstedt, Lars; Sundelin, Torbjörn

Abstract

Historically the price of a forest estate has, at least in Sweden, been closely related to the financial return from the estate, but this connection no longer seems to be that strong, other factors that previously had limited influence on prices now add to the price. Factors like site productivity and age distribution affect the financial return of a forest estate but is it obvious that these factors still influence prices as they once did? Over the last 20 years, the price of forest estates has increased dramatically. If development of prices has led to a weakened connection between return and price, could this be explained by the fact that previously price affecting factors have less weight when valuing forest estates? The purpose of the study was therefore to investigate how a number of factors influence the forest estate price; including site productivity and age distribution. The results shows that neither site productivity, nor age distribution have a significant impact on the forest estate price. What mainly influence the prices seems to be the standing forest volume on the estate and region. The development of the prices seems not only to have influenced the relationship between the return from the forest and the prices, but also minimized the influence of factors like age distribution and site productivity. This means that estates that are bought within the same region, at the same price per cubic meter, can have considerably different potential to gain financial return.

Keywords

Bidding, Faustman, Forest Estate, Market Value, Net Present Value, Standing Volume, Value, Winner’s Curse

Published in

Open Journal of Forestry
2014, volume: 4, number: 4, pages: 363-378
Publisher: Scientific Research Publishing

Authors' information

Carlsson, Sofia
Holmen
Lönnstedt, Lars
Swedish University of Agricultural Sciences, Department of Forest Products
Sundelin, Torbjörn

UKÄ Subject classification

Forest Science

Publication Identifiers

DOI: https://doi.org/10.4236/ojf.2014.44042

URI (permanent link to this page)

https://res.slu.se/id/publ/69171