Even though the price of homes have risen in recent years the net assets of families have decreased, according to Magnús Árni Skúlason, chairman of the Research Institute of Housing at the Business University at Bifröst.
RÚV reports that the assets of families have gone up but liabilities have risen even faster. According to Skúlason the net assets have decreased by 500,000 ISK per family. If the assets of pension funds are taken into account the net assets remain equal. Skúlason says that families have been borrowing freely and spent some of the money on services and goods that can not be considered long-term investments.
The loans to Icelandic families have risen sharply in recent years. In current prices each individual owed half a million ISK but now the figure is just over seven times as high or 3.6 million ISK per person. The value of the property of each individual is calculated at 8 million ISK, putting net assets at approximately 4.5 million ISK. If the assets of the pension funds are taken into the picture each individual owns about 8.4 million ISK on average.
