Around 80 percent of estate agents in Iceland have lost their jobs so far this year. “The situation is very serious,” Gretar Jonsson, head of the Association of Estate Agents told MBL.is. “Most estate agents’ owners are just hoping against hope that the market will pick up again over the coming months.”
Jonsson believes the situation now is the worst it has ever been since agent-assisted property sales began in Iceland.
According to Jonsson, a special crisis board has just been set up to help coordinate the industry’s united approach to the crisis in the housing market.
He continued by saying that the Housing Finance Fund (the public sector mortgage lending agency) must make big moves to help people buy the homes they need. “If the market remains frozen much longer, there is a real risk of more negative equity meaning people may be stuck in unsuitable homes, unable to sell, for years to come,” he said.
Well I am sorry when anybody loses their job, However, there has been a serious flaw in the Icelandic Real Estate system. Namely that the agents do not require any specialized training to allow them to become an Estate Agent. I may be wrong but I do not think there is even a test they have to take to become licensed.
So, what has happened is that individuals that are very good talkers become agents. They were unable to explain to buyers what could happen. Most agents do not know what rules, regulations, or laws apply to refinancing a home morgage.
So, now a great number of people have seen their monthly house loans payments double and triple in price. Many will lose their homes in the next few months. The government is helping with the government house loans, but their is no help currently available for people with ISK loans from the banks. Even the now government owned banks have no plan of action to help ISK loan holders, only the forgein currency loan holders.
To the people that lost their jobs – I am sorry for your misfortune.
To the people that will lose their house – my sympathy for you is boundless and I truely feel bad for the plight that you find yourselves in.
To the governement – perhaps it is time to regulate and license all Estate Agents. After all these are the people that are arranging loans that last 25-55 years for people. A small mistake can cause untold frustration and hardship for years and years.
In the boom times when houses was selling themselves easily,Do you think these estate agents like our investment banker freinds deserved the bonuses they got?
Surely the signs were there that business was getting lousey for these people well over a year ago.
Careful, Fishy – I’m starting to agree with you!
Even if the real estate agents were well trained, and certified, the situation would not have been much, if anything, different.
Would those well-trained salesmen have told people, their mortgage can potentially double or triple? Firstly, those salesmen would not have believed it even themselves (because Iceland was the richest country in the world, and getting forever richer…). Secondly, telling things like that is bad for business. Thirdly, were there even a single Icelandic person warning about the collapse of ISK? Correct me if I’m wrong, but a talk like that would probably have been taken as unpatriotic.
Given the general circumstances and the cluelessness of the Central Bank and politicians, what happened, had to happen.