Real Estate In Iceland
Located in the center of Selfoss — a town on the Olfusa river in the south of Iceland, about 40 minutes drive from Reyjavik — this 212-square-meter (2,282-square-foot) wooden house is surrounded by a walled garden 955 square meters (10,280 square feet) in size.
Built in 1953, the house has been updated through the years; the bathroom was recently renovated. The two-story house (a rarity in Iceland— most homes are single-story) has a basement with a tiled laundry room. Upstairs are three bedrooms and a bathroom; the master bedroom has a balcony that overlooks the garden.
Steps up from the living room is an open kitchen and dining area. With the exception of the entrance hall, which is tiled, there are parquet floors throughout the first floor.
The house was recently painted and the electrical and heating systems were updated, too. Heating and hot water are provided by natural hot springs and geysers, which is very common in Iceland; there is no furnace or water heater.
There is a multilevel wooden deck with a hot tub. The garden has a pond, a fountain, a gazebo and a small stream with a footbridge. There is an additional brick-paved seating/dining area as well as mature trees throughout. The 60-square-meter (646-square-foot) garage has parking for two cars and a separate guest suite with its own bathroom.
A public swimming pool is down the street; restaurants and shops are within a 10-minute walk. Selfoss is located near popular destinations like Gulfoss (a famous waterfall) and Thingvellir National Park; Keflavik International Airport is about 90 minutes away.
Alongside its economy, Iceland’s real estate market boomed for much of the last decade. Since the economic collapse, however, it has ground to a halt, said Fjola Kristinsdottir, an agent at Stadur Fasteignasala, which is based in Selfoss.
During the boom times “everything sold,” Ms. Kristinsdottir said. “Nothing stopped for a minute.” Nationwide, housing prices soared 153 percent from March 2000 to March 2008, according to Lara Jonasdottir, a price statistics specialist at Statistics Iceland, which compiles data on Iceland’s economy and society.
In Reykjavik and its surroundings — where two-thirds of Iceland’s population lives — prices rose from an average of 77,961 kronur per square meter ($57 a square foot) in 1998 to 261,759 kronur in 2008 ($191 per square foot), the peak of the market, according to the Icelandic Property Registry, a government agency.
Today, with many people out of work and uncertain about the future, many “sales” are swaps of one type of housing for another, Ms. Kristinsdottir said. “In Iceland, you always owned your home, but that’s changing,” she said. “The 20-something-year-old people, the people who would be buying their own home, they’re renting now. People are afraid; they want to see what will happen.”
In 2009, prices around Reykjavik have fallen to 245,301 kronur per square meter ($178 a square foot), according to the Icelandic Property Registry. Since March 2008 through May 2009, prices nationwide have fallen 11.5 percent, according to Statistics Iceland.
Today, the market is changing rapidly, and with many sellers forced to sell, asking prices are down by some 40 percent, said Thuridur Kristin Halldorsdottir, a real estate agent and lawyer based in Reykjavik. “Asking prices aren’t final,” she added. “Buyers can make lower offers, and they’re often accepted.”
WHO BUYS IN ICELAND
The recent devaluation of the krona has made Iceland attractive to foreign buyers, Ms. Halldorsdottir said. “They’re getting much more for their money,” she said. (According to the Icelandic Property Registry, toward the end of 2007 the value of the krona was about 60 to the dollar; today it is nearly 130.). Most common are buyers from Norway, Denmark, England and Germany, Ms. Kristinsdottir said; they typically pay in cash.
For residents of the European Economic Area, there are no restrictions on buying property in Iceland. For other foreign nationals, permission from Iceland’s Justice Department is required. There is no formal application; real estate agents handle the process by writing a letter to the department and providing information, such as a signed contract, regarding the deal, Ms. Kristinsdottir said.
Real estate agent fees (including obtaining a permit, if applicable, as well as registration fees) are about 30,000 to 40,000 kronur ($235 to $313), Ms. Kristinsdottir said. Stamp duty is 0.4 percent of the property’s appraisal value. There is an additional 1.5 percent stamp duty on the purchase price, though this tax is waived for first-time buyers.
USEFUL WEB SITES
Tourist information: http://www.visiticeland.com
Statistics Iceland: http://www.statice.is/
Central Bank of Iceland: http://www.sedlabanki.is
LANGUAGES AND CURRENCY
Icelandic; Icelandic kronur (1 krona = $0.0078)
TAXES AND FEES
There are nine payments of 35,000 kronur ($274) annually. Fire insurance, which is required by law, is approximately 35,000 kronur ($274 ) a year.
Fjola Kristinsdottir, Stadur Fasteignasala; fasteignir.visir.is; 354-480-1100