House price inflation is finally losing steam. In the past twelve months, prices have risen by 22.6% nationwide, down from 25% in August. The increase has been fastest in regional Iceland, at 23.6%, followed by multi-family homes (22.9%) and single-family homes (20.7%) in the capital area.
As these figures show, the market is cooling, and at a good clip. On the whole, SI’s measurements chime in with house price index data published last week, although the two sets of figures differ somewhat as regards the price of detached housing. Both sets of data are based on three-month averages, suggesting that August was a very calm month in the housing market.
End-of-sale effects versus plunging airfares
Summer sales generally take place in July and end in August and September. Clothing and footwear rose in price by 4.6% MoM (0.15% CPI effect) and furniture and housewares prices by 2.2% (0.14%). In addition, food and beverage prices rose 0.3% MoM (0.05%), which was less than we had expected. This month’s uptick in food prices was due entirely to the agricultural pricing committee’s announced increase in wholesale prices, which passed more or less straight through to retail prices. There was little movement in the price of other foods, many of which are imported and had already risen steeply in price in recent months. This is exceedingly welcome news.
Other items that rose in price this month are recreation and culture, up 0.8% (0.07% CPI effect), and other goods and services, which rose 0.9% (0.07%).