A working group within the Icelandic national association of pension funds has come to the conclusion that it is not worthwhile for the funds to invest money buying and renovating rental housing. It would instead be a better investment for them to build brand new. The pension funds are now looking into the idea seriously.
The pension funds’ association assembled the working group following its December contract with the Icelandic government in which the pension funds commit to take part in the country’s housing market. The working group investigated whether the pension funds could get involved by owning property and renting it out. The group’s spokesman explained that it would be economically profitable.
The idea will doubtless be welcomed by the still-beleaguered construction industry and renters struggling with the ever-more-expensive and scarce rental housing currently on offer. There are, however, a lot of empty houses for sale in Reykjavik and the number of people buying houses instead of renting is still depressed following the economic crash. More, better and (potentially) cheaper rental housing will likely not be welcomed by estate agents trying to sell houses.
Source: http://www.icenews.is/index.php/2011/09/28/26839/