Property Values Take Biggest Jump Since Financial Crash

The National Registry has issued its report on property valuation for 2023, and it does not bode well for those hoping to buy an apartment or house in the coming year.

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Overall, property valuation will rise by 19.9% on average across the entire country. Some region, however, will see a greater rise than others.

Property values in the capital area will rise by 20.2%, while in rural areas, by 19,2%, with the greatest increase in South Iceland, at 22%–and there, the greatest increase is in Hveragerði and Árborg, going up by 32%.

Valuations for different kinds of property also varied. Detached apartments and homes will rise in valuation by 25.4%, while apartments in so-called “block” apartment buildings will see a slightly lower increase, by 21.6%. Interestingly, properties for business and industry will only increase by 10.2%.

Overall, this is the greatest property valuation increase between years since the 2008 financial collapse. Individual municipalities calculate property taxes based on valuations, so even those who already own property will feel the pinch, too.

Drífa Snædal, president of the Confederation of Icelandic Labour Unions (ASÍ), said this increase will likely affect upcoming collective bargaining negotiations.

“We are in expensive times,” she told Vísir. “The prices on all resources and food are going up, interest rates are going up, and inflation is on the rise. So of course households in Iceland are taking a significant hit right now. Naturally, this will have an effect on upcoming collective bargaining negotiations this autumn, as we will be protecting the standard of living of the general public.”

The labour union Efling has also taken notice of these increasing property valuations, while also pointing out that the rental market is still poorly regulated–property owners often do rent out their properties and pin the rent to the amount they pay on property tax, loans, and other costs.

“To get a handle on unchecked increases on rent, which are now on the rise after a brief slowing-down during COVID, the regulations on when rent can be increased and why need to be clarified,” a report from Efling states in part. “Both from the beginning of the rental period and while the lease is in effect. A benchmark or cap on the allowed rental increase for general apartments needs to be established, which sets a clear end point for how high rents can be raised.”