According to a recent summary by the Icelandic tenant union comparing rent in Iceland and Norway, it appears that rent is forty percent higher in Reykjavík than in Oslo. The Norwegian website husleie.no, which keeps track of market prices for rent in Norway, displays the average price for a four-room apartment in the center of Oslo between NOK 19-20,000, which is equivalent to 260-270,000 Icelandic króna. However, the average price for such an apartment in Reykjavík, west of Kringlan, is 370,000 ISK.
The expensive Norway
It is well known that Norway is one of the most expensive countries in the world. Wages there are usually among the highest in the world, but prices are correspondingly high. Last year, the regular average salary in Norway was around seven hundred and thirty thousand ISK per month, which is a similar amount to here in Iceland. The median average salary was six hundred and sixty thousand, which is slightly lower than in Iceland, which is primarily explained by how large a group of workers receive the highest salary here. In Norway, almost three percent of employees have incomes that are higher than one and a half million ISK per month, while the percentage in Iceland is six percent.
Average salary and salary distribution
The percentage of employees in Iceland with below-average wages is considerably higher than in Norway, or a total of sixty-three percent according to the National Statistics Office, but less than sixty percent in Norway. Although the difference is not great, it does not tell the whole story, and especially not for the social groups that are on the rental market in Iceland.
Eighty percent of those who work in service and care have a salary below the average salary, and the quarter of them has a salary lower than sixty percent of the average salary. About two-thirds of general workers in Iceland have a salary below the average, or sixty-six percent, and a little over a quarter of them have a salary below sixty percent of the average salary.
Rent as a percentage of salary fifty percent higher
The rent for a four-room apartment in Reykjavík has become more than fifty percent of the average salary in Iceland. As studies have shown over the past decade, the percentage of tenants with oppressive housing burdens has been very high and growing at the same time as it has been decreasing for individuals with mortgages. Studies have also shown that the majority of tenants have wages well below average. Thus, the stress that rent causes on their livelihood is much greater than a simple comparison of average salary and average rent.
The ratio of rent to the average salary in Norway is around thirty-four percent. That means that the percentage of the average rent on the aforementioned apartment is fifty percent higher than the average salary in Iceland than in Norway. If the ratio were the same, the rent for this type of apartment in Reykjavik would have to decrease by ISK 100,000.
This is probably the reason why tenants demand that a cap being placed on rental prices until a balance has been reached in the housing market.
