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Analysis · from official data

Market Intelligence

Market stress, valuation, affordability, supply & developer signals — from official data

Chapter 1

Market state

The big picture: price direction, composite stress, and momentum by region.

Cooling · elevated stressReal house prices are easing (-3.6% YoY); sales volume is down 13% year-on-year; supply is soft (12.8 months); affordability is comfortable. Household leverage is low by historical standards — unlike 2008.

Real prices -3.6% YoYVolume -13% YoYSupply 12.8 moAffordability 31% burdenValuation 72nd pctLeverage Low

Plain-language summary of the signals below — directional, not a forecast.

Market Stress

Real-terms, cycle-relative read — each signal ranked against Iceland’s own history since 2006, with the 2008–2010 crash shown alongside today.

52/100Directional heuristic — the equal-weighted mean of the four stress sub-scores below, published only when all four are available (a missing component would change the number without the market changing). Not a precise measurement; read the components, not just the number.
Elevated · stress · directional
Real house-price growth
-3.6%YoY, CPI-adjustedHPI deflated by CPI; YoY; percentile vs full monthly history.

In the 13th percentile of monthly readings since 2006. The 2009 trough was -22.8% — today's decline is mild by comparison.

Valuation — price-to-rent
+15%prices vs rents vs the 2000 baselineHPI / actual-rent index (CP041), rebased to 100 at 2000. Higher = prices have outpaced rents (overvaluation); percentile vs full history. Context, not in the composite.

At the 72nd percentile of its history — elevated. Its high was 136.6 (2022-08); today 115.4. It's easing — -5% YoY (rents now rising faster than prices).

Real price growth & sales volume since 2006

Real price YoYSales volume YoY

Shaded band = 2008–2010 financial crisis. Real price = HPI deflated by CPI. The current partial year is omitted from annual volume.

Transaction volumeTrailing-12mo residential sales vs prior 12mo (HMS). Stress = clamp(50 - YoY*2.5, 0, 100). The historical percentile ranks this rolling figure against full calendar-year YoY values, so treat it as directional.

-12.8% YoY (trailing 12mo)

High21st pct
Affordability (payment burden)Payment burden from affordability model (2-earner median household). Stress = clamp((burden-25)/25*100, 0, 100).

30.8% of gross income on mortgage

Low
Months of supplyVísir active inventory / HMS monthly sales. Stress = clamp((mos-4)/8*100, 0, 100) — this scores only the soft/oversupply direction; a tight market (mos<4) scores 0, not high, so supply tightness shows in the level value but is not carried into the composite. Level only — no inventory history yet, so direction is unknown. Vísir is a subset of listings (conservative lower bound).

12.8months

High
Household leverage (debt-to-income)Household debt as % of disposable income (Statistics Iceland). Stress = percentile vs the series' own history.

141.5% of disposable income

Low5th pct

Estimated: Depends on a model or a chosen assumption — change the assumption and the figure changes.Payment burden, and the composite it feeds: Partly based on a modelled lending rate (policy rate + 1.0pp), not observed bank offers. The spread is fixed. About the rate assumptionsMeasured bank rates

A cycle-relative, REAL-terms stress read. House-price growth is deflated by CPI; each signal is ranked against Iceland's own 2006-onward history and the 2008-2010 crash is reported alongside today. Real house-price growth is shown as context (a bubble and a crash are both stress) and is NOT in the composite. The composite is a directional heuristic — the equal-weighted mean of the available stress sub-scores — not a measurement. Months-of-supply is a level only (no inventory history yet) and uses US-convention bands, flagged as such. Components fall back to unavailable rather than fabricating when a live source is down.Sources: Statistics Iceland (HPI, CPI, income, household balance sheet) · Central Bank of Iceland (policy rate) · HMS property register (sales volume) · Vísir Fasteignir (live inventory)

Regional momentum

View all regions →

12-month change in median sold price by municipality (nominal; HMS register, as of 6 Oct 2026) — where the market is hottest and softest. The national real-terms read is above.

Hottest
  • Norðurþing
    38,000,000 ISK · 31 sales
    +15.2%
  • Suðurnesjabær
    63,570,000 ISK · 84 sales
    +11.5%
  • Borgarbyggð
    55,500,000 ISK · 72 sales
    +11.0%
  • Ísafjarðarbær
    40,500,000 ISK · 88 sales
    +11.0%
  • Vogar
    67,500,000 ISK · 66 sales
    +8.0%
  • Fjarðabyggð
    43,000,000 ISK · 91 sales
    +7.5%
Softest
  • Ölfus
    61,143,500 ISK · 108 sales
    -2.7%
  • Garðabær
    91,950,000 ISK · 608 sales
    -4.2%
  • Vestmannaeyjar
    53,750,000 ISK · 104 sales
    -6.8%
  • Hornafjörður
    50,000,000 ISK · 36 sales
    -12.3%
  • Seltjarnarnes
    97,000,000 ISK · 89 sales
    -14.0%
  • Skagafjörður
    45,750,000 ISK · 56 sales
    -15.3%
Chapter 2

Price & affordability

Is pricing sustainable? Price vs assessment and household payment burden.

Price-to-Assessment Ratio

The classic Icelandic market-temperature gauge: how much sales clear over (or under) the official property assessment (fasteignamat). Trailing 12 months of valid residential sales from the HMS register, anchored to October 6, 2026.

+6.9%
Mildly hot
Median premium over assessmentMedian (kaupverð ÷ fasteignamat) across all valid residential sales in the trailing 12 months, expressed as a percentage above (or below) the official assessment.
+6.9%
Ratio 1.069 · n=8,499
Share over assessmentShare of valid residential sales whose price exceeded the official assessment.
75.5%
of valid sales priced above fasteignamat
Mean premiumMean ratio across the same trailing-12-month window, expressed as a premium. Reported alongside the median for context — the mean drifts above the median when a thin tail of high-ratio sales is present.
+11.9%
Mean is sensitive to outliers

Quarterly trend — national median premium

Each point is the median premium for valid residential sales settled that quarter — above 0 means properties cleared above assessment. Showing the full history (2006 onward) by default; use the buttons to focus on recent years. The 2008 crash compressed premiums to ~+5% and the 2021–22 peak hit ~+39%. Note that fasteignamat is revalued annually, so the series steps at each turn of the year: comparing levels across years reflects the revaluation as well as prices, not prices alone.

Capital area — premium by postcode

Median premium for the trailing 12 months. Bars above the national line (+6.9%) are running hotter than the country; bars below are cooler. Postcodes with fewer than 20 sales are omitted.

Price-to-assessment ratio = sale price / (official assessment * 1000) for residential sales (Fjölbýli, Einbýli, Sérbýli) on a valid contract. Ratios outside [0.3, 3.0] are dropped as data errors. Medians are used for the headline figure (robust to outliers); the share over assessment and the mean are reported alongside for context. Windows are anchored to the latest registration in the register, not today's calendar.Sources: HMS Kaupskrá (official Iceland property register) · HMS Fasteignamat (official property assessment, embedded in the register row)

Affordability Analysis

Moderately unaffordable: about 4.0× a two-earner median household's gross income (above the 3× affordable benchmark); the mortgage takes about 40% of that household's take-home pay (greiðslumat cap 35%).

Modeled buyer: 2-earner household · 20% down · 30-yr · 9% non-indexed / 4.77% indexed · income 2025 · greiðslumat cap 35% of take-home(40% first-time)

Estimated: Depends on a model or a chosen assumption — change the assumption and the figure changes.Modelled lending rates, not observed bank offers. Non-indexed: policy rate + 1.0pp. Indexed: indexed real yield + 1.3pp. The spread is fixed, so it does not reflect changes in banks’ lending margins. Assumption last reviewed 15 August 2026. About the rate assumptionsMeasured bank rates

Sources: HMS property register (prices) · Statistics Iceland TEK01002 (income) · Central Bank of Iceland (policy rate) · Central Bank of Iceland (indexed real yield) · Statistics Iceland HPI VIS01106 (history scaling)

Above the greiðslumat limit

The mortgage on the median home would take 40% of a typical household's take-home pay — above the Central Bank's 35% payment-burden cap (40% for first-time buyers). A median household would not pass greiðslumat on a non-indexed loan at this price.
Affordability ScoreNational median-multiple score (Demographia bands): 75+ = affordable, 50–74 = moderate, 25–49 = seriously unaffordable, <25 = severely unaffordable.
50.2
Moderate · 0-100 scale
Median PriceMedian residential sale price (HMS register, trailing 12 months).
69.9M
ISK millions
Price-to-IncomeRatio of median house price to median annual household income (Demographia): ≤3× affordable, 3–4× moderately unaffordable, 4–5× seriously unaffordable, 5×+ severely unaffordable. Higher = less affordable.
4.0×
Stretched · Affordable ≤3×
Payment BurdenGreiðslumat ratio: the monthly mortgage payment as a share of a typical household's take-home (disposable) pay. The Central Bank caps this at 35% (40% for first-time buyers).
40%
Above cap · of take-home

Monthly payment by mortgage type · median home

Non-indexed (óverðtryggt)
450K ISK/mo
40% of take-home · fixed principal
Indexed initial (verðtryggt)
292K ISK/mo
26% of take-home · rises with CPI

Share of a typical household’s take-home pay (the greiðslumat ratio; banks cap it at 35%, 40% for first-time buyers). Indexed loans generally start with a lower payment because they price off the real rate, but the principal is inflation-indexed so the payment climbs with CPI — a cash-flow timing benefit, not a lower real cost. The affordability score above uses the conservative non-indexed product.

12-Month Trend

Price-to-IncomeBurden % of take-home

First-Time Buyers

Accessibility Score
75.6
✓ Achievable
Years to Save Deposit
2.4 years
Assuming 20% down payment

Regional Comparison

Ranked by cost relative to local income — figures only, no verdict. “Burden” is the greiðslumat ratio: the mortgage as a share of the area’s median take-home pay, versus the 35% cap banks apply. Income is published per municipality, so this is a comparison, not a judgement.

MunicipalityPayment Burden
% of take-home		Monthly payment
non-indexed / indexed		× local median income
Reykjanesbær
503 sales / 12 mo
34%
22% indexed
370K
240K indexed
3.3×
Akraneskaupstaður
185 sales / 12 mo
35%
23% indexed
399K
259K indexed
3.5×
Akureyrarbær
557 sales / 12 mo
37%
24% indexed
399K
259K indexed
3.7×
Sveitarfélagið Árborg
346 sales / 12 mo
38%
25% indexed
402K
261K indexed
3.8×
Reykjavíkurborg
3,050 sales / 12 mo
40%
26% indexed
450K
292K indexed
4.0×
Hafnarfjarðarkaupstaður
899 sales / 12 mo
41%
27% indexed
466K
303K indexed
4.0×
Kópavogsbær
830 sales / 12 mo
44%
29% indexed
518K
337K indexed
4.3×
Garðabær
608 sales / 12 mo
47%
31% indexed
592K
385K indexed
4.6×
Mosfellsbær
259 sales / 12 mo
47%
30% indexed
541K
351K indexed
4.6×
Seltjarnarnesbær
89 sales / 12 mo
50%
32% indexed
624K
406K indexed
4.8×
Chapter 3

Supply & construction

Supply on the market, demand, and the new-build trend.

Developer & construction stress

The supply-side view the household balance sheet misses: how fast new-builds are selling, what they cost relative to older stock, and which construction vintages are reaching the register. All from the HMS register, anchored to 2026-10-06. New-build = built 2021 or later.

-23.7%
New-build sales YoY (2026-Q3)
New-build sales YoY (2026-Q3)New-build sales in the last complete quarter against the same quarter a year earlier. A new-build is a property built within five years of that quarter, so the definition moves with time and stays comparable across years.
-23.7%
Last complete quarter vs the same quarter a year earlier
Total sales YoYAll valid residential sales from the HMS register over the same two quarters. Shown beside the new-build figure so a fall can be read as either new-build-specific or market-wide.
-23.0%
All residential sales, same basis
New-build share of salesNew-build sales as a share of all residential sales in the latest complete quarter. The in-progress quarter is skipped because its counts are incomplete.
21.4%
Of all residential sales, latest complete quarter
New-build price premiumMedian price per square metre for new-builds against older stock in the capital area, trailing 18 months. Price per m² is used rather than the ratio to assessment, because the assessment of a brand-new unit often lags the finished building.
+13.9%
Per m² vs older stock (capital area)

New-build sales running at 159/month over the trailing 12 months (1,913 units).

Sales velocity & new-build share

Quarterly residential sales (bars, left axis) and the new-build share of those sales (line, right axis). New-build share uses a rolling definition (built within 5 years of each quarter), so it is comparable across the whole span. Showing the full history (2006 onward) by default — the 2008 crash, the 2021 boom, and the rate-hike slowdown all on one axis; use the buttons to focus on recent years. The most recent quarter is faded when it is still in progress — its counts are incomplete.

TotalNew-buildNew-build share

New-build pricing premium

Median price per square metre, new-build vs older stock, trailing 18 months. Price/m² is the reliable gauge here — for brand-new units the official assessment often lags the finished building, so the price-to-assessment ratio overstates the premium.

Greater Reykjavík
+13.9% per m²
New-build
894k ISK/m²
n=1,764
Older stock
785k ISK/m²
n=7,097
Nationwide
+13.2% per m²
New-build
811k ISK/m²
n=2,875
Older stock
717k ISK/m²
n=10,483

Registered properties by construction year

Properties seen in the sales register by construction year. The two most recent vintages (faded) are undercounted: newly built but unsold units never enter the register, so a low recent bar reflects both a smaller pipeline and stock that hasn't sold — itself part of the stress signal.

Developer/construction stress from the HMS register. A sale is 'new-build' when the construction year (byggar) is within 5 years of the latest registration (byggar ≥ 2021). In the quarterly sales trend this cutoff is applied ROLLING per quarter (within 5 years of each quarter's own year) so the new-build share stays comparable across the full history rather than collapsing to ~0% before the fixed cutoff year. Sales counts are valid residential contracts. The pricing premium uses median price-to-assessment and median price/m² over the trailing 18 months (ratios outside [0.3, 3.0] dropped). For new-builds the official assessment (fasteignamat) often lags the completed structure, inflating the price-to-assessment ratio, so the price/m² premium is the more reliable overpricing gauge. NOTE: the pipeline counts properties by construction vintage AS THEY APPEAR IN THE SALES REGISTER — newly built but unsold units never enter the register, so the most recent 1–2 vintages are undercounted (that undercount is itself part of the stress signal). No new-build months-of-supply is reported because the listings feed carries no construction year.Sources: HMS Kaupskrá (official Iceland property register) · HMS Fasteignamat (official assessment, embedded in the register row)

Active-inventory trend

Daily count of active Vísir listings since June 15, 2026.

15.06.05.07.25.07.14.08.03.09.23.09.08.10.8,2508,5008,7509,0009,250

Months of supply has increased by 2.1 months since June 15, 2026.

Both inputs contributed about equally: registered sales (12-month average) −8.4%, listings +9.3%.

Vísir does not cover every property listing. The series accrues from the start of daily capture and cannot be reconstructed backwards.

Loading supply and demand…
Chapter 4

Financial risk

Corporate-sector leverage as broader context for cyclical risk.

Corporate balance sheet (S11)

Leverage of Iceland's non-financial corporates — the whole sector, which includes developers and construction among other industries. Statistics Iceland does not isolate construction, so these figures don't measure it on its own; they give broader context for corporate-sector debt. Year-end 2024.

112%
Corporate loans / GDP
Corporate loans / GDPLoans to non-financial corporates (FL4 in the Statistics Iceland classification) as a share of gross domestic product. Only bank and credit loans count, so the figure is comparable with the household measure.
112%
Peak 428% in 2009
Total liabilities YoYChange in total liabilities (FL0) between year-ends, in nominal terms — not adjusted for inflation. FL0 includes equity and shares as well as loans.
+0.4%
Nominal, year-over-year
Loans YoYChange in loans (FL4) between year-ends, in nominal terms. A narrower measure than total liabilities and more sensitive to actual corporate borrowing.
-0.9%
Bank/credit loans only (FL4)
Total liabilities / GDPAll corporate liabilities (FL0) as a share of GDP. Higher than the loans measure because equity and shares are included; households carry no comparable item, so this figure is not suited to a direct comparison.
307%
Incl. equity & shares — not directly comparable to households

The leverage sits on the corporate side, not with households.

Corporate borrowing sits well above the household level on a like-for-like loans basis. Households have deleveraged since 2008; the leverage and cyclical risk now sit on the corporate side. This is the whole non-financial corporate sector (S11) — which includes developers and construction, though the data can't isolate that sector on its own.

Where the leverage sits: corporate vs household

Corporate (S11) loans / GDPHousehold (S14) loans / GDP

Loans as a share of GDP, non-financial corporates (S11) vs households (S14), over the cycle. This is the same loans measure (FL4) on both lines, so the gap is a fair comparison. The household line is the one the rest of the dashboard tracks; the corporate line covers all non-financial business — construction included, but not separable from the rest.

Annual non-financial-corporate (S11) balance sheet. Stocks are end-of-year in millions of ISK. S11 is the whole corporate sector — Statistics Iceland does not isolate construction, so read this as corporate-leverage context, not a construction-only series. Note total liabilities (FL0) for corporates includes equity/shares; loans-to-GDP (FL4) is the comparable leverage gauge against households. The PX-Web tables refresh annually around October.Sources: Statistics Iceland PX-Web THJ10001 (sector financial accounts — stocks, S11) · Statistics Iceland PX-Web THJ10002 (financial assets/liabilities as % of GDP, S11)

Chapter 5

Read on

The same data, closer in: by municipality, by postcode, by week.