Housing Prices Continue Climbing, Supply Continues Falling

A new report from the Housing and Construction Authority shows that the average price for residential real estate in the greater Reykjavík area increased by 5 million ISK in the past two months alone. Overall housing prices are climbing, but availability is rapidly shrinking.

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Real estate prices have increased by 16.6% in the past year in the capital area.

Meanwhile, the number of apartments for sale have dramatically decreased in a short span of time, going from about 4,000 available properties in May 2020 to just 1,000 today. The change was even more drastic in the capital area, where available properties went from 900 in May 2020 to just 70 at the beginning of February.

Further indications that real estate is now a seller’s market is that the average length of time it now takes to sell an apartment is just 20 days from when the property is first advertised to when a contract for sale is signed. In late 2020, that period of time last more than four months. Furthermore, the percentage of properties that have sold beyond their advertised price increased from under 10% in 2020 to over 40% in 2022.

For many Icelanders, including a disproportionate number of immigrants, this news comes at a time when many are still caught in the rental trap, with little hope for escape. More on this in our feature story on this subject, The High Cost Of Living.