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Photo: Golli.

Real Estate Sales Nearly Double, Rent Prices Rise

Real estate sales in Iceland nearly doubled between January and February of this year, according to the latest report from the Housing and Construction Authority. The jump is most noticeable in municipalities near the capital area. In Reykjanesbær, not far from the evacuated town of Grindavík, the number of sales tripled between January and February.

Rental prices rise

In Akranes, just one hour north of Reykjavík, the number of real estate sales more than doubled, while in Árborg, South Iceland, they nearly doubled. Rental prices also rose faster than general price levels, according to the report. This was especially true on the Suðurnes peninsula, where Grindavík is located, where rental prices are 16% higher now than they were in September 2023. Rental prices rose 3-9% in the capital area during the same period.

675 Grindavík properties wait for government buyout

The town of Grindavík (pop. 3,600), located on the Suðurnes peninsula, was evacuated in November 2023 due to seismic activity. The town has since seen four volcanic eruptions just to the north, in the Sundhnúkagígar area. Three houses were destroyed in the January eruption and the Government has since offered to buy homes from Grindavík residents if they choose.

On April 12, the first such purchase was approved, and 675 others were waiting to be processed. For comparison, an average of 625 real estate purchase contracts were registered in the capital area and neighbouring municiaplities each month last year. This means that the property purchases of Grindavík residents who are relocating could equal the region’s total monthly demand.

Grindavík residents say the government buyouts are proceeding too slowly, impacting their ability to relocate in the heating-up housing market. They have called a protest for this afternoon in front of Alþingi, Iceland’s Parliament.

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