Iceland’s real estate market is heating up, with nearly twice as many sales contracts signed in February as in January, according to the latest figures from Húsnæðis- og mannvirkjastofnun (HMS), the housing and infrastructure agency. As per HMS, the capital regions aw the biggest increase in home sales, with a threefold increase in signed contracts in Reykjanesbær from January to February and double the number of sales finalised in Akranes in the same time period.
The uptick in home purchases is a result of rapidly rising rental costs, making it more economical for those who can afford to buy to do so. Rents have risen most sharply in Suðurnes, where the average price of a three- to four-room rental is now 285,000 ISK, up from 215,000 ISK at the start of 2023.
As for how buyers are financing their purchases, banks are beating out pension funds. While the number of homebuyers seeking loans in 2023 was roughly equally distributed between banks and pension funds, bank loans are now being sought out twice as often as loans from pension funds.
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