What is the house price index in Iceland?

In Iceland, the House Price Index measures residential property market prices. The HPI captures price changes of all kinds of residential property purchased by households (flats, detached houses, terraced houses, etc.), both new and existing. Only market prices are considered, self-build dwellings are therefore excluded.

Why is it so expensive to buy a house in Iceland?

Since income tax is also high, this drives up the cost of labour, which also has to be made up for by increased prices in many situations. The cost of buying or renting a home in Iceland is also pretty high. The housing and rental markets are very competitive at the moment.

Why did Iceland's house price rise in Q1 2022?

“At first, the price increases were driven by hefty interest rate cuts, but now a supply shortage plays a more prominent part,” said Arion Bank in its Q1 2022 report. Iceland experienced strong house price rises in recent years, mainly driven by booming tourism, robust economic growth and limited housing supply.

Why is Iceland's housing market booming after a decade-long house price boom?

After a decade-long house price boom, Iceland's housing market continues to strengthen, amidst limited supply in the market coupled with improving economic conditions.