Morgunbladid reports on its front page today that mortgage lending by Iceland’s three largest banks – Glitnir (Íslandsbanki), Kaupthing and Landsbanki – contracted in the first quarter of 2006 by ISK 30 billion compared to last year.
In the first quarter of 2005, the three banks lent a total amount of ISK 60 billion to homeowners, according to Morgunbladid.
Morgunbladid quotes Fridrik Stefán Halldórsson of Kaupthing saying that Kaupthing’s mortgage lending declined by 20 per cent between March and April. “Higher interest rates are obviously affecting the market,” said Fridrik to Morgunbladid.
According to Morgunbladid, the Icelandic housing index has risen by 21 per cent in the last 12 months.
Morgunbladid quotes unnamed real estate agents saying that there are various indications of a slow down in the real estate market: the volume is less and people have started bidding below the offer price.