Almost half of Icelanders aged between 18 and 24 are now living in rented accommodation, according to a new survey by the Housing and Construction Authority (HMS). The findings suggest the country’s rental sector may be growing, with a noticeable increase in young adults choosing or needing to rent.
The survey found that 45% of people in the 18 to 24 age group were renting this year, compared with 34% in the previous survey. During the same period, the share of young adults living with their parents dropped by 10 percentage points. Jónas Atli Gunnarsson, chief economist at HMS, said this was only the second year the authority had used its updated survey method, meaning the figures should be viewed as an indication rather than proof of a long-term trend.
Gunnarsson described the rise in young people leaving the family home for rented accommodation as unusually sharp. He said the increase could point to an expanding rental market, although a single year’s results are not enough to confirm a lasting shift. He added that challenging conditions for first-time buyers, combined with a slowdown in the housing and construction sectors, may have encouraged more young people to rent instead of purchasing a home.
Across Iceland as a whole, 29% of adults now rent their homes, up slightly from 28% a year ago. While year-to-year changes have generally been limited, Gunnarsson said the longer-term pattern has been one of steady growth in the rental market, driven by population increases and continued barriers to homeownership for many households.
HMS also reported that residential property prices edged up by 0.09% between May and June. Annual house price growth slowed to 1.8%, marking the second-weakest yearly increase since 2011. In the Capital Region, apartment prices rose by less than 1% over the past 12 months and declined by 1.17% compared with the previous month. Gunnarsson said future surveys would show whether the increase in young renters marks a lasting change in Iceland’s housing market.