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Home-Ownership on Decline in Iceland

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Home-Ownership on Decline in Iceland

Hafnarfjörður

Photo: Páll Stefánsson.

A new poll conducted by the Housing Financing Fund (Íbúðalánasjóður) suggests that the number of homeowners in Iceland is rapidly decreasing.

Since December of 2008, their number appears to be down by more than 10 percent. At that time, 77.6 percent of respondents stated they owned the home they lived in. That ratio was 73.2 percent in October of 2013, and down to 70.1 percent this year.

There appears to be a discrepancy between this trend and the wishes of those in the housing market, for, according to the poll, the ratio of those who find renting a home uneconomical is currently 92.7 percent, compared with 55.4 percent in 2011.

About 15 percent of respondents said they were contemplating buying a home in the next 12 months. That ratio is about the same, regardless of people’s debts or savings.

People appear to stress the importance of buying their own housing despite price increases. Still, it’s hard to see how a large part of that group will be able to. A large increase in purchasing power and the increasing savings rate of Icelandic households is not sufficient for people who wish to purchase a home. Despite a record increase of those two factors, it’s nowhere near as high as the increase in real estate prices.

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