The End of The Increase in Real Estate Prices
A wide Range of Prices:
Now We Can See The End of The Large Price Increases That Have Characterized The Housing Market In Iceland Almost Since The Beginning of The Pandemic in Early 2020. However, The Annual increase in Housing Prices Has Not Been higher Since 2006.
This is One of The Things Stated in Islands bank's New Macroeconomic Forecast Published This Morning. The Bank's Experts Believe That the Real Price Increase of Apartments by 11.6% This Year Has Already Mostly Occurred, The Increase Will Be by 0.8% Next Year And Prices Will Remain The Same in 2024.
Calmer Times Ahead In The Real Estate Market:
The Housing Market is Expected To Be Calmer Next Year Than it Has Been Recently. The Count Of Samtaka Industriin And The Housing and Infrastructure Agency Indicates That a Number of New Apartments are Now Ready for Sale to Meet The Accumulated Need.
A Turnaround Seems To Have Already Begun Regarding Property Prices, Which Rose Less In July Than in The Previous Months. However, The Annual Increase Is Around 30 Percent, But the Housing Price Index Decreased Month-on-Month in August, for The First Time Since November 2019.
Demand For Housing Has Decreased, Which Islands Bank's Experts Mainly Attribute to The Actions of The Central Bank, Both Interest Rate Increases And Tighter Credit Conditions. However, There is Still Considerable Tension, as The Supply of Apartments is Very Low in A Historical Context, a Number of Apartments Are Still Sold Above The Set Price And The Sales Period Is Generally Short.
Short-Term Fluctuations Not Excluded:
In The Long Term, It Is Predicted That Apartment Prices Will Go Hand in Hand With Other Price Levels, Although Fluctuations, Even Price Reductions, In The Short Term Are Not Excluded. The Housing Market in Other Countries has Cooled Faster than Here, as There is Less Shortage of Properties And Demographic Changes Do not Increase Demand as Much.
Islands Bank's Macroeconomic Forecast Also States That Tourism Has Recovered Significantly After The Ordeal Of The Corona Virus Epidemic, Unemployment Has Become The Same As Before The Epidemic, And Economic Growth Is the Highest in 15 Years.
There Are Also Prospects For Further Strengthening of The Krona in The Coming Seasons. However, The Authors of The Macroeconomic Forecasts Believe that Economic Growth And Private Consumption Will Slow Down After Rapid Growth.