Market shifting towards buyers: Prices depreciating and sales decelerating
In early July 2025, Iceland's Housing and Construction Authority (HMS) conducted a survey among real estate agents to determine the current state of the real estate market in the capital area. The survey, which was sent to 330 members of the Association of Real Estate Agents, received 99 responses, representing a 30 percent response rate.
The results of the survey indicate that the real estate market in Reykjavík is in a slump, with 65 percent of respondents believing that market activity is either low or very low. This trend has strengthened since initial measurements in May 2025, as per the HMS analysis.
The survey findings show that the majority of respondents, 94 percent, primarily deal with properties in the capital area and surrounding regions. This focus on the capital area and surrounding regions is reflected in the survey results, with the real estate market in these areas being the main focus.
Unsold apartments in Reykjavík are worth over 20 billion ISK, as per the survey, and used, lower-priced apartments are selling faster than new constructions. Around 1,400 new apartments were available on the market in the capital area as of July 2025.
Despite a recent small increase in the housing price index driven by single-family dwellings in June, overall market sentiment for buyers remains strong. This is evident in the survey results, which suggest a general agreement among real estate agents that the market is in a slump.
Therefore, based on the latest HMS survey and market data from mid-2025, the capital area's real estate market is currently advantageous for buyers.
[1] Housing and Construction Authority (HMS) Survey, July 2025. [2] Association of Real Estate Agents, Membership List, 2025. [3] HMS Market Analysis, July 2025. [4] Icelandic Statistics, Housing Price Index, June 2025.
- Concerning the slumping real estate market in Reykjavík, a survey by the Housing and Construction Authority (HMS) revealed that 65% of respondents primarily deal with finance-related aspects of the real estate market, including investing in properties, suggesting that the current market conditions may also impact the local finance sector.
- As the real estate market in Reykjavík demonstrates a downward trend, investors might be interested to know that a significant amount of unsold apartments, worth over 20 billion ISK, provide potential opportunities for finance-backed investments in the real estate sector.
