Icelandic property market

Flourishing real estate market

Iceland has experienced a marked rise in house prices in recent years, driven by growing tourism, robust economic growth, and limited supply. In just under a decade (2010-2019), values have increased by 109%, and on average, by 9% annually since 2000. More recently – from Q1 to Q2 2022 – the nationwide residential property price index rose by 22.88%. On top of that, real estate sells in record time, at around 4%-8% above the asking price.

According to Pálsson Fasteignasala, there are four major drivers: the economy, interest rates, demographics, and government subsidies. Prospective investors should consider these before moving forward with a purchase.

Advantages of investing in Iceland

The majority of foreign buyers are from the US, UK, Germany, and Canada. Many factors draw them to Iceland, ranging from the high standard of living and the dramatic and diverse landscape to the low crime rate and the strong education and healthcare systems. People who invest in a holiday home in Iceland appreciate the relaxing, peaceful, and quiet vibe.

Many family homes were constructed generations ago by ancestors, giving the architecture a unique feel. Furthermore, the population is low (approximately 376,250), meaning buyers are investing in Iceland’s future – an exciting and potentially profitable opportunity.