Over 85% of homes in the capital area have a property value over 60 million krónur (US$432,000, €403.000), according to a new report from the Housing and Civil Engineering Agency (HMS). This is an increase of 4,9% in the first five months of the year.
The purchase price of residential properties has increased by 8.4% since May 2023 while inflation has contributed to a 6.2% increase in prices in the same period. Confirming that is absolutely blows to be a renter, rental prices in the capital area are up a whopping 13.3% in the same period — meaning landlords cannot blame their rent hikes on inflation alone. It’s greed, people.
Another takeaway from the HMS report is that the net mortgages of buyers in the past year is lower than in the period spanning spring 2022 to 2023, indicating that the people or entities purchasing real estate in the capital area are those with considerably more disposable income and savings, rather than first-time buyers.
It should be noted that what one gets for their money is shrinking while prices rise. Those looking for new-build apartments in central Reykjavík can expect to pay over 1 million krónur per square metre, while older homes sell for around 900.000 kr. per square metre. Value for money improves ever so slightly the further from the city centre one searches.