Report: The property market in Iceland 2022
Today Croisette Real Estate Partner releases the annual report on developments in the Icelandic property market. The report can be downloaded below.
- The Covid-19 pandemic had significant impact on the Icelandic economy, however pre-covid levels were reached in
2022. The economy showed healthy economic growth of 7.1% and unemployment reached pre-covid levels.
- The Icelandic economy is diversified across sectors. The largest contributing sectors are: Public Administration, Real
Estate, Production, Retail and Wholesale and Tourism. The Tourism industry has increased significantly from 2008 and
today is one of the core sectors.
- The low interest rate regime during 2020 resulted in a significant increase on the demand-side of the housing market. Furthermore, the low interest rate regime allowed individuals that were credit or liquidity constraint.Opening the market for potential buyers that before were not considered home-buyers.
- The total transaction amount in 2022 was 5.4 bn USD, slightly lower than 2021. Increased interest rate main reason for the decrease in transaction value. More than 70% of transaction value was registered in the Capital region or around 4 bn USD.
- Rental yield has trended downward from 2020. With increasing asset prices downward pressure is put on rental yield as rental contracts do not account for asset value. Asset prices rose proportionally more than rental prices and current rental yield is between 4-7% depending on location and type of real estate.
Styrmir Bjartur Karlsson, Managing Director, Croisette Iceland
Phone: +354 899 90 90