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Apartment Prices Could Rise Up to Nine Percent Annually

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Apartment Prices Could Rise Up to Nine Percent Annually

Reykjavík

Photo: Ian Funk.

Prices for apartments in the capital area are expected to rise an average of eight or nine percent annually in the coming years, Vísir reports. This is the estimate of economist Ari Skúlason at Landsbankinn, although he notes that it’s difficult to make an accurate prediction, given the dearth of data available from the real estate market and a number of additional uncertainties.

“Will the market calm down without a crash?” was the question Ari addressed in his talk at a conference about the future of the capital area on Saturday. During the talk, the economist expressed concerns over the lack of available data on how many apartments are actually being built in and around Reykjavík, or on what the current real estate demand actually is.

“This is a somewhat dangerous position, in that we could make the wrong step because we haven’t acquired enough information about how many apartments are [being built], how many are available, and how likely it is that the apartments will be sold at the prices they’re being offered at,” he said.

Looking at previous trends, however, he estimates that prices will continue to rise. “I predict that next year, they’ll go up eight or nine percent and then similarly going forward, although maybe a little less. Not like last year, when real estate prices rose by just under 20% in a single year.”

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