One-Third of Apartments Selling Above the Asking Price

architecture downtown Reykjavík houses

About a third of apartments in the Greater Reykjavík area are selling above the asking price, with the asking price for single-family homes having risen dramatically. The average selling time has fallen by 14 days over a one-year period.

The Housing and Construction Authority

According to a report from the Housing and Construction Authority published yesterday, approximately one-third of apartments in the Greater Reykjavík area are selling above the listed price. Similarly, the average selling time is decreasing: roughly 37 days in June of this year, compared to 51 days in June of 2020. The HCA has also observed a similar trend in rural Iceland, where apartments have sold in roughly 62 days compared to 89 days last year.

Fewer new apartments are being sold above the listed price when compared to older apartments. In June of this year, 50.8% of old apartments were sold under the marked price, 16.4% were sold at the marked price, and 32.7% were sold above the listed price. 23.8% of new apartments, on the other hand, were sold under the marked price, 61.9% were sold at the marked price, and 14.3% were sold above the asking price.

Roughly 33% selling above the asking price

In an interview with Vísir yesterday, Ólafur Sindri Helgason, Chief Economist with the Housing and Construction Authority, stated that, in many instances, prospective buyers have offered many millions of króna above the asking price.

“The proportion of buyers that are offering above the asking price has increased and has been increasing,” Ólafur stated. “Assets are selling quickly; the average selling time continues to decrease; and the supply of real-estate on the market is decreasing, with a 60% contraction over a one-year period.”

The number of registered purchase agreements in the Greater Reykjavík area has been at a record high, although these numbers have begun to fall below the numbers recorded in 2007. A total of 7,432 purchase agreements were registered during the first half of 2021, compared to a total of 4,915 during the same time last year. (In 2007, there were 6,622 registered purchase agreements.) “But if we look at the first six months of the year, there is still a 50% increase in the number of purchase agreements compared to 2020,” Ólafur stated.

Interest in detached, single-family homes has been especially high, which likely owes to historically low interest rates: “The cost of single-family homes has been rising dramatically and has far exceeded the price of real-estate in apartment buildings. We’re talking a 25% increase between July 2020 and July 2021, compared to a 16% increase among apartments.

Individuals have also begun to look to rural areas: “Some have begun to look for real-estate on the outskirts of the capital area, given the dramatic rise of single-family homes.”

Housing security improving

According to the report, housing security is improving among residents and so are household finances. In surveys conducted by the HCA in collaboration with Zenter, the number of respondents who state that they are experiencing housing security totaled 91.9% in May of 2021, as compared to 90.2% in June of last year.

As noted by the authors of the report, leaseholders (renters) have seen the biggest change in attitude: In June of 2019, 51% of leaseholders stated that they experienced housing security, compared to 66% this year.

Yellow Weather Alert Issued for Reykjavík Area Tomorrow

The Icelandic Met Office has issued a yellow weather alert for the Greater Reykjavík Area tomorrow, January 4. Orange and Yellow weather alerts will also be in effect in most parts of the country tomorrow, excluding parts of North East Iceland. 

As indicated on the Met’s web site, a yellow weather alert will be in effect in the Greater Reykjavík Area from 9 am to 2 pm tomorrow. The Met Office predicts a southeast gale or a severe gale, with wind speeds between 15-24 m/s. Routes that lead out of the city – Kjalarnes, Hellisheiði, Reykjanesbraut – are expected to be extremely windy with violent gusts. There is a high likelihood of poor visibility and snowfall. The storm is expected to pass rather quickly, but traffic delays are expected in the meantime. Travellers are advised to monitor road conditions closely, e.g. on safetravel.is

Yellow and orange weather alerts will also be in effect in other parts of the country during the following hours:

ORANGE ALERTS
South Iceland: 8 am to 3 pm
Faxaflói Bay (Southwest Iceland): 9 am to 3 pm
Breiðafjörður (West Iceland): 11 am to 4 pm
Central Highlands: 11 am to 6 pm

YELLOW ALERTS:
Westfjords: Noon to 5 pm
North West Iceland: Noon to 5.30 pm
South East Iceland: Noon to 5 pm

The Met Office’s countrywide forecast for the next 24 hours reads as follows: 

“Northerly 10-18 m/s with snow or snow showers in North- and East-Iceland. Lighter wind and becoming fair in South- and West-Iceland. Light wind and dry in all parts late in the evening. Frost 3 to 13 deg. C. Becoming southeast 18-25 tomorrow with snow at first, later rain or sleet. Turns to southwest 10-18 in the afternoon with showers of rain or sleet in the south and west parts. Becoming warmer, temperature 2 to 7 deg. C. late afternoon.”