Record Real Estate Activity in Iceland

Vala Hafstað

The real estate market in Iceland is booming, mbl.is reports. September was a record month in terms of number of closings, as well as in terms of turnover, according to information from the Housing and Construction Authority.  

The real estate market continued  to boom in October and November, although not quite reaching September levels in the capital area. In the vicinity of the capital area, however, November was a record month in terms of the number of properties being unlisted. At the same time, that number decreased elsewhere in the country.

Diminishing supply of properties has resulted in considerable price increases during the past months, and the average time properties are listed has shortened.

According to a poll conducted in November by the Housing and Construction Authority and Zenter, 70 percent of respondents expect real estate prices to continue to increase for the coming 12 months. In the capital area, 76 percent of respondents expect such a price increase, compared with 61 percent of respondents outside the capital area.

An increasing ratio of homes has been selling above asking price, especially in the capital area, where that ratio increased from 11 percent in June to 21 percent in October. The figures are based on a three-month moving average.

The average time new properties remain listed has shortened since spring. In the capital area, it was 79 days in the spring, but is 61 days at present. On average, other properties remain listed for 43 days, compared with 49 in the spring. This is the shortest time on record, but such information has been collected since 2013. Outside the capital area, the time new properties remain listed has shortened from 122 days in the spring to 86 days. For other properties, the time listed was 87 days in the spring, but is now 76 days.

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