The number of vacant apartments in Iceland reaches 10 thousand units
Vacant flats in Iceland have reached the 10 thousand unit mark. Vacant apartments account for 6.5% of the total housing stock. There are about 2,500 such dwellings in the capital.
The largest number of vacant apartments is registered in the regions of Mulating, Borgarbiggd and Skagafjordur. The proportion of vacant dwellings here varies between 15 and 20%. In rural areas, the proportion of vacant dwellings is higher than in urban areas. The lowest number of vacant dwellings is recorded in the south-west of Iceland. The lowest rate is recorded in Reykjanesbere with less than 0.5%.
Despite the significant number of vacant apartments, there is still a shortage of affordable properties in and around Reykjavík. This is contributing to accelerated price growth. The situation in the local market is as follows:
1. In the summer, the share of apartments costing up to ISK 60 million was 15% of the total supply.
2. At the beginning of 2025, there were about 3,974 dwellings on the market.
3. In the capital area, there were 2,362 flats on offer, 350 more than in 2024.
4. Reykjavík accounted for 60% of the total supply. At the same time, most properties were priced in the range of ISK 60-100 million.
5. Only 12% of the apartments in the capital cost less than ISK 60 million.
Based on HMS analysts, the Icelandic housing market maintained a weak momentum until the end of 2024. The number of transactions has fallen for three consecutive months. Around 900 contracts were signed in November. After the summer surge in demand, buyers were cautious and in no hurry to conclude deals.
In November, around 16% of properties went for more than the original asking price. This trend was most pronounced in the capital, where the share of such transactions reached 17%. In the suburbs and other regions of the country, the figure was 12%.
Transactions above the asking price were more common in the secondary housing market. In 2024, the share of such properties was 19%. In the new-build sector, the figure reached 13%.
In Reykjavík, apartments are sold for an average of ISK 808 thousand per square metre. This is the highest in the country. In second place is the southern region, where the price per square metre is ISK 620 thousand. The lowest costs are in the northwestern and eastern parts of Iceland. Here housing costs almost half as much as in the capital.
Apartments in Iceland market overview
According to official statistics, 228 developers declared bankruptcy in 2024. Compared to 2023, this number decreased by 25%. The number of new construction project registrations has also fallen.
The OECD forecasts that Iceland’s economy will grow by 2.3% in 2025. This will rise to 2.8% in 2026. Higher wages in the country will boost private consumption.
Rental yields in the country are low at around 6%.