Looking for luxury condos? Cooling prices forecasted in Iceland

After price surge, slowing economy is forcing sellers to chop asking prices

TRD NATIONAL /
Feb.February 23, 2019 02:00 PM

Reykjavik (Credit: Getty, iStock)

Iceland may have recovered from a debilitating financial crisis, but now it faces a new problem: an increasing number of empty luxury apartments and a need for affordable housing.

A booming housing market and low mortgage rates have pushed up the prices of luxury property in cities like Reykjavik, Bloomberg reported, but now many units are being left empty as the economy cools.

The number of tourists expected to arrive this year is slated to drop nearly 3 percent while the country’s economic growth is forecasted to cool to 1.8 percent, the slowest pace in more than five years.

A recent report by Arion Bank, cited by Bloomberg, suggests the country’s housing market will follow suit with “expectations of increased supply” moderating price growth.

“We have lowered our prices and can’t lower them further, since the price is now lower than the cost of building,” architect Hildigunnur Haraldsdottir told the outlet on trying to move 15 units in her brand new luxury condo that have sat on the market for a year and counting.

The slowdown comes after the price of new luxury apartments in Iceland rose 17 percent between October 2017 and 2018, compared to a rise of 3 percent in general property prices over the same period, according to the report. Meanwhile, the Icelandic government recently released a report saying 8,000 homes are needed to fill the demand for affordable housing in the country.

In 2017, Iceland saw the largest growth in property prices of any country in the world, according to Knight Frank’s Global House Price Index. That year, property prices in the country rose by 15 percent, compared to an average global increase of 4.6 percent. [Bloomberg] – Decca Muldowney


Related Articles

arrow_forward_ios
209 Dean Street and 315 Adelphi Street (Google Maps)

Sprawling Brooklyn townhouses drive week’s priciest deals

Sprawling Brooklyn townhouses drive week’s priciest deals
The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

US housing supply reaches nearly 40-year low

US housing supply reaches nearly 40-year low
Gov. Andrew Cuomo with Judge Lawrence Marks and Judge Daniele Chinea (Getty, Linkedin, iStock)

Flip-flop on eviction ban extension highlights state’s chaotic response

Flip-flop on eviction ban extension highlights state’s chaotic response
Nelson Rockefeller and 812 Fifth Avenue Photos via Getty; StreetEasy; Google Maps)

Fifth Ave co-op owned by Rockefeller family hits market

Fifth Ave co-op owned by Rockefeller family hits market
Joe Jonas and Sophie Turner with 199 Mott Street (Getty; Modlin Group)

Joe Jonas and Sophie Turner list NYC pied-à-terre for $5.9M

Joe Jonas and Sophie Turner list NYC pied-à-terre for $5.9M
A million homeowners haven’t requested forbearance on their mortgages — and are now at risk for foreclosure and eviction. (iStock)

1M struggling homeowners didn’t request forbearance. Now what?

1M struggling homeowners didn’t request forbearance. Now what?
(iStock)

Landlords lost about $9B in rental payments last quarter: report

Landlords lost about $9B in rental payments last quarter: report
Jennifer Lopez and Alex Rodriguez with their Malibu beach house (Getty; Courtesy Compass)

J-Lo and A-Rod part ways with Malibu “fixer-upper” for $6.8M

J-Lo and A-Rod part ways with Malibu “fixer-upper” for $6.8M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...