The demand for housing is still greater than the available supply, demonstrating the continuing need for more housing builds, reports RÚV.
Due to the shortage of housing, sales were a fifth lower in July than they were at the same time last year. Housing costs are currently very high due to inflation, which is currently at 9.9%.
“The situation is such, and it seems that it will remain so, that there are more buyers than sellers,” says assistant professor at the University of Iceland, Már Wolfgang Mixa.
The population of Iceland has significantly grown in the last decade, which has further strained the housing market. As of July, 381,000 people were living in Iceland which is 66,000 more than in 2007. Statistics Iceland predicts this growth will continue with Iceland expected to add 40,000 people in the next four years to reach a total of 420,000 people.
“The fantasy would be that there would be more supply of building sites, which is, of course, a bit of an old chestnut, but it’s still true that there is more supply and that there is diversity in that supply,” says Már.
There are some constructions currently in the works, but their impact on the housing market is up in the air.
“Whether [these constructions are] enough given the growth and demand that’s in the market remains to be seen,” says Már.
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