Rental Market in “State of Emergency”, Association Says Skip to content

Rental Market in “State of Emergency”, Association Says

By Ragnar Tómas

architecture downtown Reykjavík houses
Photo: Photo: Golli. Reykjavík’s old homes set a romantic scene. .

The upcoming municipal elections revolve mainly around the “state of emergency in the housing and rental market,” a spokesperson for the Icelandic Tenants’ Association has stated. Since 2005, apartments owned by legal entities that own more than one apartment have nearly doubled, RÚV reports.

Open Meeting at Kex Hostel yesterday

The Icelandic Tenants’ Association held a public meeting at Kex Hostel yesterday. The aim of the meeting was to “demand answers” from candidates in the upcoming municipal elections on how they intended to ensure housing for tenants in Reykjavík.

In an interview with RÚV, Guðmundur Hrafn Arngrímsson, a spokesperson for the Icelandic Tenants’ Association, stated that tenants had been made to suffer from the slow development of housing in the capital region through ever-increasing rent, greater uncertainty, and deteriorating social status.

The Association maintains that legal entities and wealthy individuals have swept up real estate for the sake of profit and that investors have little or no incentive to speed up development as a slow pace ensures higher rent.

A few facts

In its coverage yesterday, RÚV presented a handful of facts to shed light on the state of the rental market.

  • Apartments owned by legal entities that own more than one apartment have nearly doubled since 2005 (from 11,000 to 22,000).
  • The cost of rent has doubled, i.e. increased by 100%, over a single decade. At the same time, rent has increased by just over 15% in other parts of Europe.
  • According to a recent poll conducted by the Housing and Construction Authority, only 10% of tenants willingly choose to rent; 25% are on the rental market because of necessity; and two-thirds of tenants are renting temporarily.
  • Over 10% of tenants allocate over 70% of their disposable income to housing, with the proportion of social housing on the public market being low, despite high demand.

According to the Tenant’s Association, individuals above the age of 35 have “little chance” of escaping the rental market. 63% of young adults below the age of 24 live at home with their parents (39% of those who are under the age of 29).

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