Size Of Rental Market Severely Underestimated

The size of the Icelandic rental market has been severely underestimated, according to a recent report by the Housing and Construction Authority (HMS). Approximately 74 percent of foreign residents in Iceland occupy the market. The group has been underrepresented in official surveys.

A 2024 residential survey by HMS showed that 15 percent of adults in Iceland rented their dwellings. New information highlight a discrepancy in the numbers, showing that only 15 percent of Icelandic citizens occupy the rental market.

In conversation with RÚV, HMS economist Kristín Amalía Líndal said that the new reports demonstrate that immigrants are likelier to rent than Icelandic citizens. Some of them choose to stay in the country temporarily, while approximately half of them want to stay indefinitely, Kristín claimed.

Additionally, the report showed that foreigners tend to experience more insecurity on the rental market than Icelanders, including high prices, temporary leases, market instability and limited supply of housing. HMS’ survey also showed that a lower rate of foreign renters receive housing benefits compared to Icelanders.

HMS gathered data from Efling, VR and Eining-Iðja union members after suspicion of discrepancy between Icelanders and immigrants.

An operational Alþingi task force is currently evaluating possibilities to facilitate the housing market. In conversation with RÚV, chair of the task force and People’s Party MP Ragnar Þór Ingólfsson claimed that the committee will present the proposed actions in October.