Luxury apartments in Downtown Reykjavík Remain Unsold Skip to content

Luxury apartments in Downtown Reykjavík Remain Unsold

Housing construction in Reykjavík has not been according to demand for the past few years, according to Minister of Finance Bjarni Benediktsson, RÚV reports. Bjarni feels that enough large and expensive apartments have now been built. Many new apartment buildings that have risen in downtown Reykjavík in recent years now stand empty.

Hildigunnur Haraldsdóttir, architect and one of the owners of an apartment complex at Tryggvagata 13 that’s situated in the city’s centre, stated in a recent interview that the supply of apartments now far exceeds demand. She says that she and the team behind Tryggvagata 13 originally sought to build more modestly sized apartments for first-time buyers, only for the city of Reykjavík to deny them this due to the high cost of building downtown.

Bjarni Benediktsson, explains that these big and expensive luxury apartments perhaps haven’t been meeting the real demand of people. However he doesn’t consider the problem serious, adding that “this seems to be a manageable project if we follow the propositions and advice we’ve now received,” he says.

Sigurborg Ósk Haraldsdóttir, the head of Reykjavík city’s Office of Property Management and Economic Development, is not worried about the future. “The numbers show us that we’re also building more small apartments,” she says. “And there hasn’t been as much talk about those apartments, simply because they’ve been selling more easily,” adding that she’s “confident that we’ll eventually reach equilibrium.”

In the last few years, there has been a public outcry for new apartments, resulting in numerous new projects. In addition to new apartment complexes, the city has made a concerted effort to compact settlement by allowing people to turn their garages into small apartments. This move has been welcomed, but might come with its own set of problems, says supreme court lawyer Sigurður Helgi Guðjónsson. In a recent interview, he explains that this might create far fewer new apartments than the city might hope for, and potentially increase problems and legal disputes concerning how to divide properties.

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