Rent Prices Rose Over 100% In Last Decade

Real estate and rental prices have risen disproportionately more in Iceland than in the rest of Europe in the last 10 years, according to data from the Icelandic Tenants’ Association, reports Fréttablaðið.

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Guðmundur Hrafn Arngrímsson, chairman of the Tenants’ Association, compared changes in the Icelandic rental market over the last 10 years with figures from Eurostat, the European Union’s statistical institute, which shows developments in real estate and rental prices in Europe.

“Rents, for example, rose by 104 percent in Iceland between 2011 and 2021, while rents on the European continent rose by only 15 percent,” says Guðmundur.

“This gives us reason to believe that there has, in fact, been very unfair price formation in the rental market. Tenants in Reykjavík actually live in one of the worst situations in Europe,” adds Guðmundur.

Guðmundur believes there is every reason to correct the rental price. “It will happen by holding back all increases and setting a framework for price formation in the rental market with a certain rent ceiling.” The trade union movement has called for such a rent ceiling for seven months without receiving signatures.

“In the 2019 living wage agreement, the trade union movement forced promises from the government and its counterparts on price control in the rental market. The then Minister of Social Affairs, Ásmundur Einar Daðason, presented a bill in February 2020 on a rental break. That bill was, however, withdrawn,” says Guðmundur.

In an agreement between the unions and the state, this promise has been fulfilled. “The bill has been re-introduced but the price control has been dropped,” says Guðmundur, who calls for the government to keep its promises and for the provisions of the Rent Act on fair and equitable rent to be respected.

“The situation in the rental market is homemade and the responsibility of the government. It is therefore up to them to ensure that those who live in the situation of being stuck in the rental market and struggling with fewer and fewer properties are protected from the arbitrariness and self-absorption of the landlords.”