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Reykjavík Housing Market Stabilizing

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Reykjavík Housing Market Stabilizing

Reykjavík

Photo: Ian Funk.

The time of sharp real estate market growth in Reykjavík is over, according to a report released yesterday by Landsbankinn bank. RÚV reports the market is expected to be calm over the next six months.

Real estate prices in the capital area rose by 1.8 percent over the latter half of 2017. They had risen 13.7 percent in the first six months of the year, indicating a clear shift in the market.

Property worth has risen consistently from year to year since 2009, with the exception of 2013. Real estate prices rose 18.9 percent from 2016 to 2017, one of the largest increases since 2005. The average rise in property worth from 2002 to 2017 was considerably lower, at 9 percent.

It is considered unlikely for real estate prices to rise more this year than last. The increase is expected to be 8.5 percent.

Landsbankinn economist Ari Skúlason told RÚV demand for housing in the capital area is lower than it has been in recent months and years. “Those who are in a position to make a move are rather choosing to wait. It is also true that the supply of new housing is increasing considerably. So it’s not, as it was for example last spring, that every last person who was planning to buy an apartment thought the apartment they were seeing was the last one which would come on the market for a while. So they had to get it. The behaviour is much calmer than it was then, definitely,” stated Ari.

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