2007: a hot year for iceland

House prices in Iceland were far from frosty in 2007, reveals Knight Frank…

New figures from the latest Knight Frank Global House Price Index reveal that prices in the Reykjavík region rose by almost 19% during 2007. Price growth picked up towards the end of the year at a time when many countries across Europe were seeing the rate of house price inflation slowing.

This has occurred despite interest rates of over 13%, although the latest movements in interest rates have been downward. Increased access to credit, the increased availability of mortgage products, low unemployment and a booming economy are some of the factors that have driven house price growth, although rates of employment growth are expected to slow during 2008 which should act as a brake on house price inflation.