Rent in Iceland has risen by 40.2% since 2011, according to figures published by the Ministry of Welfare. At the same time the number of Icelanders who rent has grown significantly.
Rising rents squeezing low income and younger families
According to figures published by the Ministry of Welfare rental prices in Iceland have risen by 40.2% between year-end 2011 and end of July 2015. Property prices have risen 41.8% over the same period. However, the Ministry points out that housing costs have risen significantly more for renters than those who live in owner occupied housing.
Related: Icelandic Economy boomed in first six months of 2015: GDP grew by 5.2%
At the same time as rental prices have risen, the number of Icelanders who rent has grown. In 2007 only 17% of homes lived in rental apartments, compared to 27% in 2013. The greatest increase was in the age group 25-34, and among low-income and single parent households. A key reason, according to the Ministry of Welfare, is that the financial crisis led to a reduced access to mortgages, especially to first time homebuyers and low income families.
Housing market picking up: construction still well below pre 2008 levels
The figures show the housing market has been picking up since 2009, when it reached a low point following the crash. In 2009 only 6,000 properties were sold in Iceland, but more than 10,000 annually since 2012. At the same time the share of properties sold to first time home buyers has doubled. In 2008-2010 less than 10% all properties were bought by first time homebuyers, but in 2015 this figure has jumped to over 20%.
A major reason for rising real estate prices, the Ministry points out, is that the construction of new apartments has yet to pick up since it collapsed in 2009.
Rent in Iceland has risen by 40.2% since 2011, according to figures published by the Ministry of Welfare. At the same time the number of Icelanders who rent has grown significantly.
Rising rents squeezing low income and younger families
According to figures published by the Ministry of Welfare rental prices in Iceland have risen by 40.2% between year-end 2011 and end of July 2015. Property prices have risen 41.8% over the same period. However, the Ministry points out that housing costs have risen significantly more for renters than those who live in owner occupied housing.
Related: Icelandic Economy boomed in first six months of 2015: GDP grew by 5.2%
At the same time as rental prices have risen, the number of Icelanders who rent has grown. In 2007 only 17% of homes lived in rental apartments, compared to 27% in 2013. The greatest increase was in the age group 25-34, and among low-income and single parent households. A key reason, according to the Ministry of Welfare, is that the financial crisis led to a reduced access to mortgages, especially to first time homebuyers and low income families.
Housing market picking up: construction still well below pre 2008 levels
The figures show the housing market has been picking up since 2009, when it reached a low point following the crash. In 2009 only 6,000 properties were sold in Iceland, but more than 10,000 annually since 2012. At the same time the share of properties sold to first time home buyers has doubled. In 2008-2010 less than 10% all properties were bought by first time homebuyers, but in 2015 this figure has jumped to over 20%.
A major reason for rising real estate prices, the Ministry points out, is that the construction of new apartments has yet to pick up since it collapsed in 2009.
