Rental Rates Continue To Soar

Rental rates all over Reykjavík have increased dramatically over just the past five years alone, data compiled by Viðskiptablaðið shows.

Gathering figures on rental rates for different sections of Reykjavík from the National Registry, for the time period beginning January 2011 and ending July 2016, rental rates have increased by over 50% over the past five years.

West of Kringlumýrarbraut, in western Reykjavík, and in Seltjarnarnes – a separate municipality located on the eastern tip of the Reykjavík peninsula – rental rates were at 1,637 ISK per square metre in January 2011, and a 50m² apartment in these areas went for about 81,850 ISK per month. In July 2016, however, the average square metre of rental space went for 2,512 ISK, and the average monthly rent was 125,600 ISK.

All told, the rental cost of a square metre in Reykjavík has increased by 53.4% in about five years. In fact, all areas of Reykjavík have seen sharp increases in rental rates, especially in the downtown area.

As reported, AirBnB rentals have been amongst the contributing factors that have pushed up rent rates. Jóhann Már Sigurbjörnsson, the chairperson of the Renters’ Association of Iceland, says that locals simply cannot compete with tourists on the rental market. In some cases, he says, renters have been asked by landlords to vacate their properties during high tourist season.

“This condition implies that renters have to pack up their stuff and move out while landlords rent out the property to tourists,” he told reporters. “The government, local authorities, and even labour unions must respond to this. There are thousands of apartments going off the rental market and onto the tourist market. Nothing comes in their place.”