Rental prices in registered Reykjavík housing increased by 6.1%, and increased by 12.9% in neighbouring municipalities, RUV reports. Prices rose the most outside of the greater capital area, at 14.5%. Prices remained the highest in the downtown postal code of 101, at around 3,000 ISK per square meter. This comes from a Housing Finance Fund report comparing rental rates in September 2017 and September 2018.
The finances of the construction industry have improved considerably. Revenues have reached their 2005 level of 360 billion ISK. 2017 profits were 41 billion ISK; twice as much as 2015. The companies’ capital has increased more than other sectors of the economy from 2009 to 2015.
The rental market is very tight due to limited supply. Thousands of workers have moved to the country to work in the tourism and construction industry. The rise of AirBnB and lax enforcement of regulation has exacerbated the crisis by taking hundreds of apartments off the market. This has forced the young, the poor, and particularly immigrants to live in crowded apartments without a rental contract.
The state significantly cut funding for social housing 20 years ago. Thousands of apartments are under construction or have been approved in the capital region; half of those in Reykjavík. The slowing growth in tourism, many new hotels scheduled to open in the next few years, and all the new apartments may ease the crisis.
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