Residential Real Estate - Iceland

In Iceland, the Residential Real Estate market market is expected to reach a value of US$112.30bn in 2024.
This projection indicates an annual growth rate (CAGR 2024-2029) of 7.85%, leading to a market volume of US$164.00bn by 2029.
It is worth noting that in the global comparison, China is projected to generate the highest value in the Real Estate sector, with an estimated worth of US$112.9tn in 2024.
Iceland's residential real estate market is experiencing a surge in demand from international investors due to its high-quality properties and picturesque landscapes.

Definition:

The residential real estate market covers the leases and transactions of residential properties. Residential real estate leases refer to the market where landlords and tenants enter into agreements for the rental of residential properties, such as apartments, houses, and condominiums, while residential real can be defined as buying, selling, or transfer of ownership of residential properties.

Structure:

The residential real estate market covers real estate transactions and leases, and the section, residential real estate leases, is divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and for real estate renters as well.

Residential real estate transactions
Residential real estate leases

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Residential Real Estate market in Iceland has been experiencing significant growth in recent years, driven by customer preferences, local special circumstances, and underlying macroeconomic factors.

Customer preferences: One of the key customer preferences in the Icelandic Residential Real Estate market is the desire for spacious and modern properties. With a growing economy and a higher standard of living, there is an increasing demand for larger homes with modern amenities and high-quality finishes. Additionally, customers are also seeking properties that offer energy efficiency and sustainability features, reflecting the country's commitment to environmental sustainability.

Trends in the market: One notable trend in the Icelandic Residential Real Estate market is the shift towards urban living. As more people move to cities for employment opportunities and access to amenities, there is a growing demand for residential properties in urban areas. This trend is further fueled by the limited availability of land in urban centers, leading to higher property prices and increased competition among buyers. Another trend in the market is the rise of luxury properties. With an influx of high-net-worth individuals and foreign investors, there has been a surge in demand for luxury homes and high-end apartments. These properties often offer exclusive features such as breathtaking views, private amenities, and proximity to cultural and recreational facilities.

Local special circumstances: One of the local special circumstances that has contributed to the development of the Residential Real Estate market in Iceland is the country's unique geography. Iceland's stunning natural landscapes, including volcanoes, glaciers, and hot springs, attract tourists from around the world. This has led to an increase in demand for vacation homes and rental properties, particularly in popular tourist destinations such as Reykjavik and the Golden Circle.

Underlying macroeconomic factors: The growth of the Residential Real Estate market in Iceland can be attributed to several underlying macroeconomic factors. Firstly, the country's strong economic performance and low unemployment rate have increased consumer confidence and purchasing power, driving demand for residential properties. Additionally, low interest rates and favorable mortgage lending conditions have made it easier for individuals to access financing and invest in real estate. Furthermore, Iceland's growing population, fueled by immigration and a higher birth rate, has also contributed to the increased demand for housing. This population growth, coupled with limited housing supply, has put upward pressure on property prices, creating a favorable market for sellers. In conclusion, the Residential Real Estate market in Iceland is experiencing growth due to customer preferences for spacious and modern properties, the trend towards urban living, the rise of luxury properties, local special circumstances such as tourism, and underlying macroeconomic factors including strong economic performance and population growth.

Data coverage:

Figures are based on total and average value of residential real estate, residential estate transactions and leases.

Modeling approach:

Market size is determined by a combined top-down and bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, 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:

Data is modeled using current exchange rates. 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.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

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Residential Real Estate - Iceland

Value

Volume

Analyst Opinion

Transaction Value

Revenue

Household Type

Real Estate Type

Living Space

Methodology

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