It has rarely been this hard to start out in the property market in Reykjavík for the first time and sadly, it does not seem like this will change in the next couple of years.
RÚV reports that previous data on the difficulty of getting on the property ladder has been skewed, resulting in inaccurate information from studies undertaken over the last 15-20 years. Viðar Ingason, financial expert at VR (Verzlunarmannafélag Reykjavíkur), warns that it is much harder to buy an apartment or house now despite what might be said in previous reports.
“It is harder today than it was 15 – 20 years ago to find your own place, as a 25 – 34 year-old,” he says.
There are several possible reasons for the flawed data. For one, VR’s recent analysis took in various factors left out of previous studies to paint a more realistic picture of the realities that young first time buyers face.
The study shows that 25 – 34 year olds are instead looking at apartments in the neighbouring suburbs of the greater capital area, rather than housing in downtown Reykjavík. In addition, previous reports focused on the rise in wages before taxes, which are not as representable as looking at the paid salary.
From 2010 to 2015, the prices have risen about 47% over 5 years, and Viðar says it will only get harder over the years. This is due to the fact that the demand is constantly increasing and the supply cannot keep up with it. More and more property is used for the accommodation of tourists rather than city residents.