Cost of Living in Iceland

Iceland has one of the highest living costs in the world, making it one of the most expensive countries. Whether you live in Iceland or are a visitor, the cost of living can be a significant consideration due to everything from groceries to housing. Anyone planning to move or travel to Iceland must understand the factors driving the cost of living.

How expensive is Iceland?

The cost of living in Iceland is generally higher than the cost of living in the UK. Because of Iceland’s remote location, smaller market, and reliance on imports, groceries, dining out, and basic goods are often more expensive. Reykjavik’s housing costs can also be higher than in many UK cities, although this varies by location. As a result of the high cost of importing these essentials, transportation and fuel are more expensive in Iceland. In terms of day-to-day expenses, Iceland typically surpasses the UK despite both countries having high living costs.

Iceland has become a popular destination for expats in recent years and there are many factors that contribute to this. Although this northern haven suffered a lot during the economic crash in 2008, it quickly bounced back and now its economy is amongst the strongest in the world. This is in part due to the boom of its tourism sector and the fact that it boasts employment rates above 99%.

Many expats find the safety that Iceland is well-known for very appealing, as crime rates on the island are estimated to be the lowest in the world. It’s so safe in Iceland that 95% of the police force is actually unarmed.

Without rent, a single person’s estimated monthly costs in Iceland are 1,199.5€. So, if you’re planning on moving to Iceland, it’s best to get acquainted with how much it will cost you to live there.

Can a foreigner open a bank account in Iceland?

The only way to open a bank account in Iceland as an expat is by getting your hands on a kennitala, also known as an Icelandic ID number. You can apply for your kennitala upon arriving in the country. This number is essential if you plan to file taxes, register a car, get health insurance and use banking facilities.

Citizens from EEA/EFTA states can apply for a kennitala through the Icelandic National Registry. While citizens of all other countries need to apply for their Icelandic ID number in person.

Once you receive your kennitala, you can also apply for an electronic ID. This ID is stored on your phone’s SIM card and allows you to perform different, official actions over the internet, such as opening a bank account. For all of this to work, you will need to have an Icelandic SIM, so upon arriving in Iceland, it’s not a bad idea to visit a cell phone store.

Accommodation costs in Iceland

Housing costs

The housing market in Iceland is very competitive. If you’d like to buy an apartment in the city centre of Reykjavik, you may be shocked to find that the average cost per square metre is €4,000. With the average size of an apartment in the capital’s centre being around 80 sq metres, you will be looking at a final price of about €300,000.

Of course, the city you chose to settle in will play a major role when it comes to pricing. It would be way cheaper to buy a house in the more rural areas of Iceland, however, by doing that, you’ll be limiting your access to a good job and other local amenities, which are only present in the city.

How much does rent cost in Iceland?

The average price of rent for a one-bedroom apartment, located in the city centre, is around €1,200. However, if you’re moving to Iceland with your family, you can opt for a larger, more affordable home outside of the city centre for around €1,650.

And if you’re living solo and really don’t want to spend a lot on rent, you can always go for a single room in shared accommodation. These usually cost between €700-€1,000 per month.

Iceland has a great rent benefits system, which comes into play after you’ve lived in Reykjavik for more than six months and have finally gotten your social security number. If you qualify for this system, payments will either be made directly to your landlord or your bank account to help offset your monthly rent price. These payments will be based on your monthly income and other factors.

Cost of utility bills

Unlike rent, utilities in Iceland are quite affordable. This is due to all of the natural wonders on the island – volcanoes and geysers. The country harnesses most of its energy from geothermal sources and hydropower. This makes Iceland extremely sustainable, as it gets 85% of its energy from clean renewable sources.

So, the energy supply in Iceland is not only environmentally friendly but also quite affordable. For example, if you lived in an 85 m2 apartment, you’d pay an average of €90-€125 for utilities on a monthly basis. If the house you’re living in is shared amongst a few people, the bills will be even lower.

Transportation expenses

Reykjavik is not the biggest of cities and walking from one place to another can be easily achieved. However, if you’re living out of the city, in the country’s more rural areas, using public transport can be quite useful. Iceland’s entire transport system consists of busses which are really efficient and reliable. The price for a single bus journey will set you back €3.40. So, if you’ll be travelling by bus on a regular basis, you can save quite a bit of money by getting yourself a monthly pass. These go for around €80-€90.

Cost of necessities

Food costs in Iceland

Since most products you find at the supermarket in Iceland have been imported, their price is quite high. Also, bear in mind that due to this, fruit and vegetables you buy in Iceland won’t be as fresh as produce you’re used to in your home country.

Sports and leisure

Engaging in sports and leisure activities in Iceland will set you back around €60 – €100 euros a month, with the average price of a fitness club monthly membership being around €50, while a cinema ticket costs about €11. However, if you’re a fan of theatre performances, you’ll be looking at around €40 per ticket.

Takeaways

As you can see, living in Iceland can be as affordable as you can make it. Some things are cheaper than others, but on the whole, moving there is not out of reach for any professional with a secure job. And if you’re wondering how much it would cost you to move to Iceland from the UK, maybe we can help you find out?

Although there isn’t a fixed price for such a removal service, we, at Fantastic Removals, can provide you with a personalised quote that factors in all your international relocation needs. Just give us a call and we’ll get the ball rolling!

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