House prices in Iceland are not unreasonably high. This is the assessment of Landsbankinn, in a new report published yesterday.
Though many people complain anecdotally that property prices, especially in Reykjavík, are out of control and unsustainable, the bank report is less alarmist.
The report states that although recent months have seen a very large rise in house prices, the overall development is good when looked over the longer-term.
RÚV reports that prices are still some way off the heights they achieved in the run up to the 2008 banking crash.
Credit is no longer as freely available as it once was and it is therefore much more difficult to get a mortgage to buy a house than it was between 2004 and 2008.
Though house prices peaked in 2004-2008, they are now at a historic high when compared to the 20-year purchasing power average.
The Landsbankinn report states, however, that the real cost of property is in good accordance with wage earners’ purchasing power over the long-term.
An average apartment in Reykjavík will not usually set you back much less than USD 300,000.