Median Age in Iceland Lower Than Anywhere in European Union

Iceland flag national team

According to new data published by Eurostat last week, the median age of the European Union population was 44.4 years old as of January 1, 2022. The median age in Iceland, 36.7, is far lower—lower in fact, than in any country in the EU.

Iceland is not a member of the EU, but it is part of the European Free Trade Association (EFTA), along with Lichtenstein, Norway, and Switzerland. Eurostat measures the median age in EFTA countries alongside that of countries in the EU.

In 2022, the median age in EU countries ranged from 38.8 in Ireland and 39.7 in Luxembourg to 46.8 in Portugal, 46.1 in Greece, and 48.0 in Italy.

The median age in the EU has increased by 2.5 years since 2012, when it was 41.9 years. This is an average of .25 years annually. Iceland’s median age has also increased since 2012, but less than it has in the EU: it’s only gone up 1.4 years in the last ten years. The only EU countries that did not see an increase in their median age last year were Malta and Sweden. There was no change at all in Malta, where the median age remains 40.4 years. Sweden’s median age went down, if only incrementally, from 40.8 years in 2012 to 40.7 years in 2022.

Europe facing a ‘marked transition towards a much older population structure’

The recent Eurostat findings also measured what it calls the “old-age dependency ratio,” that is, “the number of elderly people (aged 65 and over) compared to the number of people of working age (15-64).” In 2022, more than one fifth of the EU population (21.1%) was aged 65 and over. Demographic aging is “likely to be of major significance in the coming decades,” reads the report. “Consistently low birth rates and higher life expectancy are transforming the shape of the EU’s age pyramid; probably the most important change will be the marked transition towards a much older population structure.”

As of 2022, the old-age dependency ratio in the EU increased to 33%, up 5.9 percentage points (pp) from 27.1%  in 2012. “This indicator varied among EU members,” explains the report, “but remained above 20% in all of them.” This is true in Iceland as well, where the old-age dependency ratio in 2022 was 22.5%, up from 18.9% in 2012.

Across the EU, there was an average increase of 3.1 pp in the share of the population aged 65 or over between 2012 and 2022. Considered alone, Iceland had less of an increase in this indicator, only going up 2.4 pp over ten years, but the country still experienced more of an increase in this indicator that a number of countries surveyed, including Latvia (2.3 pp), Switzerland (1.8 pp), Austria (1.6 pp), Sweden (1.5 pp), Germany (1.4 pp), and Luxembourg (.8 pp).

These findings are significant and are expected to dramatically impact daily life and economies throughout Europe in the future. As the Eurostat report explains, “As a result of demographic change, the proportion of people of working age in the EU is shrinking while the relative number of those retired is expanding. The share of older people in the total population is expected to increase significantly in the coming decades. This may, in turn, lead to an increased burden on those of working age to provide for the social expenditure required by the ageing population for a range of related services.”

See Eurostat’s full summary of its findings, in English, here.

Eurostat: House Prices Risen Most Sharply in Iceland Since 2010

architecture downtown Reykjavík houses square

According to a new report by Eurostat, house prices have risen most sharply in Iceland over the past decade when compared to other European countries. Between 2010 and the first quarter of 2021, house prices in Iceland increased by ca. 140% and the cost of rent rose by almost 70%.

Estonia the only country that compares

Yesterday, Eurostat, the statistical office of the European Union, released a new report on the prices of homes and the cost of rent within the EU (and among members of EFTA). The report indicates that house prices have risen most sharply in Iceland compared to other European countries, or approximately 140% between 2010 and the first quarter of 2021. The cost of rent in Iceland has risen by almost 70% over the same period. Compare this to the building-cost index, which has increased by approximately 57% since 2010. The consume-price index has remained relatively stable.

The only other European country that has seen a similar increase in the prices of homes is Estonia, where cost has risen by approximately 130%. In Sweden and Norway, house prices have increased by 80% compared to ca. 50% in Denmark. The average rise in house prices over the past decade in Europe is approximately 35%. Only four countries have seen homes decrease in value over the past decade: Greece, Italy, Spain, and Cyprus.

The cost of rent has generally seen a more minor increase in Europe over the past decade, when compared to house prices, or approximately 15%. In a few countries, however, rent has risen faster than the cost of homes, e.g. in Finland, Ireland, and Lithuania. In Norway, Sweden, and Denmark, the increase in the cost of rent is much lower than in Iceland, or approximately 20%.

Interest rates raised and mortgage regulations tightened

Iceland Review reported on Wednesday that the Central Bank had raised key interest rates by 0.25%, bringing the rate to 1.5%. This change marked the Bank’s third interest rate hike since May, indicating a shift in direction as the economic forecast has improved.

Throughout last year, the bank’s Monetary Policy Committee (MPC) consistently lowered interest rates in response to the pandemic recession but now says it expects the domestic economic recovery to continue. The Central Bank’s key interest rate reached a historic low of 0.75% in November last year. In comparison, rates in January 2020 stood at 3% and in January 2019 at 4.5%.

The Central Bank also tightened mortgage regulations at the end of September, stating that rising real estate prices had “gone hand-in-hand with increased household debt.” The move, which entails instituting a maximum debt-to-service ratio of 35% for borrowers (40% for first-time buyers) is intended to support stability in the housing market.

May put some families in a “tight spot”

As reported this summer, this increase in key interest rates will likely have the most significant impact on those who signed non-indexed mortgages with variable interest rates. A report from Landsbankinn this summer demonstrated a 1% increase in variable interest rates for a non-indexed mortgage of ISK 30 million could result in an ISK 25,000 rise in monthly payments.

Read more about Iceland’s housing market below:

Reykjavík Throws Out ISK 4.5 Billion Worth of Food Yearly

It’s estimated that Reykjavík residents throw out ISK 4.5 billion ($35.99m/€32.1m) worth of food every year, Vísir reports. Food waste in the capital has been periodically tracked by the Environment Agency of Iceland. In 2016, it conducted a survey of household and business food waste in the capital; this fall, it will repeat the survey to determine how this year’s food waste levels compare.

In 2016, it was discovered that every person residing in Iceland throws away an average of 23 kilos (51 lbs) of consumable food and 39 kilos (86 lbs) of unconsumable food annually. In addition, each person living in Iceland pours out an average of 22 kilos (49 lbs) of cooking oil and 199 kilos (439 lbs) of beverages every year. There was no significant difference in how much food people wasted in different parts of the country and the overall figures were comparable to those in other European countries.

“There are a lot of uncertainties about these measurements, which can make it difficult to make comparisons,” noted Margrét Einarsdóttir, a researcher at the Environment Agency. “But the goal now is to continue developing them. There aren’t any recognised or standardised methods for measuring food waste.”

The Environment Agency received a grant from Eurostat, the EU’s statistical office, to carry out this study, and specifically asked that researchers conduct a pilot study to determine what measurements are best suited to tracking food wastage.

A thousand randomly selected households and around 700 businesses will participate in this year’s study, which Margrét says is specifically being staged in the fall, when the results are more realistic, as people are traveling less and there are fewer public holidays. Participants will be asked to weigh both the consumable and non-consumable food that they dispose of during the study period and record them in a diary. The companies surveyed will all work with food in some capacity.

Margrét says, however, that it is vital to the study that data is collected from across a wide spectrum of businesses. The last time that the survey was conducted, only 84 of the 701 companies surveyed submitted their data.“No data was received, for instance, from fisheries, fish processing plants, or companies in the dairy industry,” the 2016 survey explains.“It undeniably distorts comparisons with other countries when we’re missing data from such big and important industries.”

When asked if she had any predictions about the results, Margrét said that as a researcher, she wanted to avoid such things, but that she hopes that an increased public awareness has led people to modify their behaviours.“All you can really say is that there has been a lot of discussion about food waste over the last few months and you’d hope that it would help people to make better use of their food. Both households and businesses.”