Iceland property prices increased fastest in Europe last year

Property prices in Iceland increased faster last year than in any other European country surveyed. The increase in par value of houses was higher even than in Norway, where a property boom is in progress.

Of the 23 European countries surveyed by Britain’s Royal Institution of Chartered Surveyors, only Iceland broke the ten percent annual price increase mark in property prices last year.

Following next on the list was Norway, with nearly ten percent, and in third place came France on seven percent. A steep rise in property prices is worrying Norwegians who fear a property bubble burst and an overheating of the economy – as well as hardship for prospective first-time-buyers.

However in Iceland, which is recovering from a severe recession and a housing market crash, big gains in the short-term are being viewed as a positive development.

The property market in Ireland shrank in value last year, with par value of properties going down there by 17 percent. After the Irish came Spain, with price decreases of ten percent, and Cyprus third on eight percent.

The Institution’s report says it came as a great surprise that Iceland topped the list of biggest annual property price increases; especially when the country’s financial system completely collapsed just three years ago. The report concludes that real estate price hikes are another indicator of how well Iceland has pulled itself together after the crash, Ví reported.