The CEO of the Federation of Icelandic Industries (SI), Sigurður Hannesson, has raised concerns that the government’s new housing package fails to address the fundamental issue of land supply.
While he welcomes efforts to reform the housing market, Hannesson emphasised that the root problem — the shortage of available housing — remains unaddressed.
Attempts to Stabilise the Market
The government’s package, unveiled yesterday, aims to stabilise the housing market with measures such as reducing indexation, simplifying regulations, and increasing affordable housing options. It also includes provisions to allocate private savings towards housing loan principal.
Hannesson acknowledged the government’s intention to ease inflation pressures, but stressed the need for more substantial action.
“I understand the desire to help more people own homes, but the real issue is the lack of available housing,” the CEO of SI said. “We need more land and better planning from municipalities. The state and local authorities must work together on this.”
New Plan For Úlfarsárdalur Poses Questions
Among the government’s initiatives is a plan for 4,000 new apartments in Úlfarsárdalur, a large outdoor recreation area in 113 Reykjavík. However, Hannesson pointed out that critical questions remain unanswered about the development’s logistics and viability.
Another concern he raised was the potential impact of these reforms on rental apartments, warning that reducing their availability could exacerbate inflation. This, Hannesson stressed, contradicts the government’s goals.
Source: Icelandreview.com
