Real estate prices increased more in Iceland than in the rest of the Nordic countries during the pandemic, according to Nordregio’s annual State of the Nordic Region report. The report notes that real estate prices increased considerably across the entire region, RÚV reports.
One of the report’s authors attributed higher real estate prices throughout the Nordics in part to an increase in people working from home during the COVID-19 pandemic. For example, prices increased in rural areas as people moved out of urban areas over the course of the pandemic.
Finland stands out as one Nordic country where the price increase was more modest and where the housing market is most stable.
Financial blow different for certain demographics
Overall, the report found, Nordic economies have fared well with the upheaval presented by the global coronavirus pandemic. For example, fewer bankruptcies were declared in Iceland in 2020 than the annual average from 2014 to 2019.
However, the blow of the pandemic was not felt equally across all demographics of society. The past two years have seen the wealth gap increase between various social groups in all Nordic countries. In particular, the pandemic has most negatively affected the health and finances of the elderly, young people and immigrants.
Government benefits made a difference
“Economic mitigation measures seem to have yielded fairly good results in Iceland, where tourism is a large industry and was greatly affected by the pandemic,” said Gustaf Norlén, one of the editors of the State of the Nordic Region report. “We can see that the government’s support measures for companies and employees have contributed to fewer bankruptcies and a much faster recovery than after the financial crisis of 2008.”