Cost of Living in Iceland

Iceland has always been dubbed as one of the happiest countries in the world where people lead healthy and peaceful lives. However, a comfortable life in this Nordic nation comes with a price and it only gets tougher as prices continue to rise almost every month.

Compared to its fellow Nordic countries, the cost of living in Iceland is around 7.10% higher than in Norway and 39.25% higher than Denmark. Expats will be surprised that the prices of products in this country are way expensive by European standards. Another important factor to consider is that though Iceland has an excellent standard of healthcare system, costs of treatments and medical services for expats from outside the European Union can also be expensive Most foreign nationals in Iceland live in Reykjavik, the capital where the cost of living is 45.2% higher than Texas (USA) for groceries, 31.6% higher than Kuala Lumpur for household costs and around 71.1% higher than Dubai in terms of transportation.

Housing Costs

Because of the growing demand from the influx of expats but limited availability in the local housing market, rental prices in Iceland is quite pricey. In fact, rental cost/s is the second largest expenditure in this country whereas it takes about 27.6% of an individual or family’s income. Expats who want to get a budget-friendly accommodation should look at the towns outside Reykjavik, the capital and Hafnarfjordur which is the third-largest city in Iceland. Below are some of the common monthly rental prices that expats will encounter once they start hunting for accommodation:

• One bedroom apartment (city centre) – ISK 155,114 or USD 1,400
• One bedroom apartment (outside the city centre) – ISK 118,600 or USD 1,000
• Three bedroom apartment (city centre) – ISK 259,120 or USD 2,350
• Three bedroom apartment (outside the city centre) – ISK 204,900 or USD 1,860
• Two bedroom furnished apartment in Reykjavik – ISK 315,530 or USD 2,870
• Three bedroom furnished detached house in Selfoss (southern region) – ISK 499,670 or USD 4,545

Expats holding a residence permit may purchase an apartment or house in Iceland through banks or the Housing Finance Fund. A new home in the capital city of Reykjavik may be purchased for ISK 300,000 to ISK 350,000 or USD 2,730 to USD 3,180 per square metre while properties in the suburbs are cheaper and cost roughly ISK 200,000 or USD 1,820 per square metre or less.

• Three bedroom villa in Selfoss – ISK 30,000,000 or USD 272,880
• Four bedroom house with two bathrooms in Reykjavik – ISK 84,800,000 or USD 771,330
• Two bedroom apartment in Reykjavik – ISK 24,900,000 or USD 226,500

As with most countries abroad, utilities are seldom included in the rental cost. Expats in Iceland can budget a minimum of KR 11,000 or USD 100 to cover their electricity, heating and water consumption. Subscription to private television stations is worth ISK 30,000 or USD 275 per month while the state broadcaster charges ISK 18,000 or USD 165 per person per year.

Hefty Prices in the Grocery

According to Júlíana Björnsdóttir, an Icelander traveller and writer: “It’s a daunting reality that nowadays it’s even possible to buy a return flight to London or Copenhagen for the same price a family of four pays for the weekly grocery shopping.” This sums up the truth that in Iceland, groceries can cost a lot. The goods brought from the supermarket or local outdoor market is the highest expenditure in this country which takes about 33% of one's monthly income.

• One litre of milk – ISK 147 or USD 1.35
• Loaf of white bread – ISK 305 or USD 2.75
• A dozen eggs – ISK 630 or USD 5.70
• One kilogramme of locally produced cheese – ISK 1,545 or USD 14.03
• One kilogramme of white rice – ISK 383 or USD 3.50
• One kilogramme of boneless chicken breast – ISK 2,140 or USD 19.45
• One kilogramme of apples – ISK 350 or USD 3.17
• One kilogramme of onion – ISK 210 or USD 1.90
• One kilogramme of tomato – ISK 475 or USD 4.32
• One kilogramme of potato – ISK 285 or USD 2.60
• A bottle of middle-range wine – ISK 2,300 or USD 20.90

Cost of Daily Transportation

Travelling within the country is not cheap as gasoline costs a fortune. Expats, however, may opt for the local transport system. Iceland has an extensive network of buses which are the locals' most common mode of getting around. Local buses connect all the suburbs including the cities of Hveragerði, Selfoss and Akranes. Foreign assignees can also ride a cab, but taxis only usually operate within Reykjavík, the capital.

• One litre of gasoline – ISK 195 or USD 1.80
• Taxi flag down rate – ISK 690 or USD 6.25
• Taxi rate one kilometre – ISK 265 or USD 2.40
• 20 tickets (adults pass) – ISK 8,300 or USD 75.50
• 20 tickets (12-17 years old) – ISK 3,000 or USD 27.30
• 20 tickets (six to 11 years old) – ISK 1,300 or USD 11.85
• One way single ticket – ISK 420 or USD 3.80
• Monthly pass – ISK 11,750 or USD 106.90