Price of Real Estate in Iceland Doubled Since 2001 Skip to content

Price of Real Estate in Iceland Doubled Since 2001

There has been a constant increase in turnover on the Icelandic real estate market since 2001 with one exception, when turnover decreased temporarily in 2006. The average price of property has doubled between 2001 and 2007.

According to Fréttabladid, the average price of apartments has gone up from almost ISK 15 million (USD 236,000, EUR 164,000) in 2001 to more than ISK 30 million (USD 473,000, EUR 329,000) in November 2007.

The weekly turnover on the real estate market in the capital region is about ISK 6 billion (USD 95 million, EUR 66 million) and the average amount of each bill of sale is ISK 33 to 37 million (USD 520,000 to 583,000, EUR 361,000 to 405,000).

The annual turnover in the capital region has increased from ISK 81 billion (USD 1.3 billion, EUR 887 million) in 2001 to ISK 286 billion (USD 4.5 billion, EUR 3.1 billion) in 2007, according to numbers from November, but is expected to be ISK 310 billion (USD 4.9 billion, EUR 3.4 billion) when December is included.

“People are talking about a recession in the real estate market and that the price of property has dropped here as in the other Nordic countries and in the US, but that is not the case judging by these numbers,” said Svanur Gudmundsson, the editor of Hús & lög, the real estate newsletter.

“Although the banks have limited loan-granting and increased interest rates it cannot be estimated by looking at these numbers what effect it will have on the real estate market,” Gudmundsson said. “It is not unlikely that more will take loans in foreign currencies.”

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