Key regions: United States, China, Japan, Germany, United Kingdom
The Real Estate market in Iceland has been experiencing significant growth and development in recent years.
Customer preferences: Customers in Iceland are increasingly looking for modern and energy-efficient properties. With the rising awareness of environmental issues and the desire to reduce energy consumption, there is a growing demand for properties that are built with sustainable materials and equipped with energy-saving features. Additionally, customers are also seeking properties that offer a high level of comfort and convenience, such as those with smart home technology and modern amenities.
Trends in the market: One of the key trends in the Icelandic Real Estate market is the increasing popularity of urban living. As more people are moving to urban areas in search of better job opportunities and a vibrant lifestyle, the demand for properties in cities like Reykjavik has been on the rise. This trend is driven by the availability of amenities such as restaurants, shopping centers, and cultural attractions in urban areas. Another trend in the market is the growing interest in vacation homes. Iceland's unique natural landscapes, including its geothermal hot springs, glaciers, and volcanoes, have made it a popular tourist destination. As a result, there is a demand for vacation homes in scenic locations that offer a peaceful retreat and easy access to outdoor activities.
Local special circumstances: Iceland's geographical location and climate present some unique challenges and opportunities in the Real Estate market. The country's volcanic activity and seismic activity mean that properties must be built to withstand earthquakes and other natural disasters. This has led to the development of innovative construction techniques and materials that ensure the safety and durability of buildings. Additionally, Iceland's strict regulations on foreign ownership of properties have had an impact on the Real Estate market. Non-residents can only purchase properties in designated areas, and there are restrictions on the types of properties that can be purchased. This has limited the supply of properties available to foreign buyers and has contributed to the increasing prices in the market.
Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the Real Estate market in Iceland. The country has experienced strong economic growth in recent years, driven by sectors such as tourism, renewable energy, and technology. This has led to an increase in disposable income and a higher level of consumer confidence, which has translated into increased demand for properties. Low interest rates have also played a role in driving the Real Estate market. The Central Bank of Iceland has maintained historically low interest rates to stimulate economic growth and investment. This has made borrowing more affordable for homebuyers and has encouraged investment in the Real Estate sector. In conclusion, the Real Estate market in Iceland is developing in response to customer preferences for modern and energy-efficient properties, as well as the growing interest in urban living and vacation homes. The country's unique geographical location and strict regulations on foreign ownership have also shaped the market. Strong economic growth and low interest rates have further fueled the demand for properties in Iceland.
Data coverage:
Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.Modeling approach / Market size:
Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.Additional Notes:
The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.
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