Rental market facing saturation
Rental prices are sky-high in Reykjavik right now and experts at Arion bank believe that the market might soon become satured. Mbl.is/Ómar Óskarsson
Following Iceland's economc collapse in 2008, young and low-income people surged onto the rental market and demand for rental apartments surged. In turn, rental prices have mounted. Economist Anna Hrefna Ingimundardóttir at Arion bank believes that the development is now undergoing a turnaround and that the rental market is becoming saturated.
In 2007, 17 percent of Icelandic homes were rental homes and this number mounted to 28 percent in 2012. Last year, however, the figure went down by one percent, for the first time since the collapse.
"Rental prices have gone up immensely in the past few years and the rental prices are so high that it's more economical to invest in an apartment, for those who are able to," explains Ingimundardóttir speaking at a meeting yesterday concerning the Icelandic housing market at Arion bank this morning. The number of home-owners is rising according to Ingimundardóttir.
Following the economic crash, the age group 25-34 surged onto the rental market and in 2012 they had reached 28 percent from a mere 9 percent in 2007. This figure went down to 24 percent last year.
