The head of delelopers Aflvaki predicts that by the end of the decade, over 100,000 people aged 25-49 will be living in something other than owner-occupied housing.
Around five percent of the Icelandic population, most of whom are over fifty, own about 30 percent of all residential properties in Iceland. By the end of the decade, 107,000 individuals aged 25-49 could be living somewhere other than in their own homes.
This is according to Sigurður Stefánsson, managing director of Aflvaki, a development company that, among other projects, aims to build housing clusters for the elderly.
Sigurður wrote an article about housing market trends for Innherji on Vísir, stating that this development significantly increases wealth inequality.
He argued that the construction of residential housing over the past decade has not kept pace with growing demand, particularly as families are getting smaller and fewer people are living in each home. As a result, ordinary families now face a difficult situation, as they struggle to save for a down payment or cover the rapidly rising costs of housing.
Dagur B. Eggertsson, an MP for the Social Democratic Alliance, and Snorri Másson, an MP for the Centre Party, discussed Sigurður’s article, housing policy, and homeownership on Rás 2.
Snorri argued that the shift in homeownership patterns is partly linked to a broader transition away from a certain societal model. He suggested that the increase in the number of people without owner-occupied housing largely aligns with the rise in immigration.
A large group of people has moved to Iceland, many of whom may wish to buy a home, but there are also many who only intend to stay in the country for a few years.
Dagur agreed that part of this trend is due to societal changes but traced the root cause further back in time. He pointed to the abolition of the verkamannabústaðir (workers’ housing programme) around the turn of the millennium.
That was likely, on its own, one of the biggest mistakes ever made in Icelandic housing policy. These were thousands of homes that people could own through a social framework. For fifteen years, nothing replaced it. Fortunately, we are now building non-profit housing for this group.
Dagur rejected the notion that the homeownership model is in sharp decline. He said that many people still want to own their homes but find it difficult to do so. He noted that government support has shifted from helping people enter the housing market to assisting those who already own homes.
Additionally, he said the student loan system has been hollowed out to the point that it is now highly disadvantageous for young students to enter the housing market.
Snorri acknowledged that building non-profit housing is good, but argued that governments cannot prioritise everything. At the beginning of this century, 80 percent of housing support from the government was directed towards homeownership, but this proportion has now dropped to 40 percent.
So the focus has shifted elsewhere, and it’s no coincidence that the result is a relative decline in homeownership. But as I keep pointing out, tens of thousands of new residents have been added in a very short period.
He said that while there are many benefits to imported labour, it is never without consequences, as seen in the housing market and in preschools, where infrastructure has not been expanded in line with the demand for services created by population growth.
Source: Ruv.is
