Iceland rents fall 0.92% in September 2026 as house prices rise

Capital-area rents fell 0.92% in September 2026, a second monthly drop, while Icelandic house prices rose 1.06% on the month and 1.77% on the year.

The facts

The capital-area rent index fell -0.92% in September 2026 to 129 points, after a 0.15% fall in August, leaving it 1.07% below the July level.
Rents are still 3.2% higher than a year earlier in nominal terms, but with inflation at 5.9% that works out as a 2.6% fall in real terms.
The house price index rose 1.06% on the month to 114.8 points and 1.77% over the year, down from 2.25% in the year to August.
Price growth was entirely a capital-area story: the capital index rose 1.42% on the month while the regions were unchanged.
Within the capital, detached and terraced homes gained 1.57% and apartments 1.36%. Outside it, apartments rose 1.45% but detached homes fell 0.60%.

What it means for your money

Entry is getting more expensive while the rent that pays for it shrinks. Prices rose 1.06% in a month; rents fell 0.92%.
For a landlord the real-terms figure is the one that bites: 3.2% nominal rent growth against 5.9% inflation means the rent cheque lost 2.6% of its purchasing power over the year.
Location now decides the outcome rather than timing. An apartment bought outside the capital gained 1.45% in a single month, while a detached home in the same regions lost 0.60%.

What to watch

Whether a third consecutive monthly fall pushes the annual nominal rent figure toward zero. At 3.2% there is room, but not a great deal of it.
The split between the capital and the rest of the country, where the index was flat in September and detached homes are already falling.

Sources: HMS https://hms.is/frettir/visitala-ibudaverds-haekkadi-um-1-prosent-a-milli-manada; HMS https://hms.is/frettir/visitala-leiguverds-laekkadi-um-0-92-prosent-i-september-2026