Iceland Growing It's Real Estate Bubble Just 3 Years After Their Complete Economic and Financial Collapse

Who could have guessed that people's more so short sighted and their memory so close to a goldfish's?

(Bloomberg) May 30, 2012 — Iceland’s crisis-management policies are creating the island’s next property bubble less than four years after its banking meltdown threw the economy into its worst recession. 

Prices for new homes touched a record last quarter, having surged 40.1 percent since the final three months of 2010, according to estimates by the National Registry of Iceland in Reykjavik. Average house prices have risen 11.3 percent since the market bottomed at the end of 2009, according to central bank data at the end of the first quarter. 

[...] “Last year, investors finally realized that the capital controls aren’t going anywhere any time soon,” Jonsson said. “That has led to a change in investors perspective, and they’re now moving in greater numbers into longer assets and snapping up properties.”

Another unintended consequence of stupid government actions.

An average apartment cost about 28 million kronur in May, the National Registry of Iceland estimates. That compares with 12.4 million kronur in 2001. The average Icelandic household earned about 4.4 million kronur in 2011, according to Statistics Iceland.
“The exorbitant prices in the housing market, so early after the collapse of the Icelandic economy, are quite shocking,” said Finnur Eiriksson, a computer scientist living in Reykjavik. “I’ve decided to stay in the rental market for some time to come. For anyone that has been shopping around, the drop in property prices after 2008 hasn’t been significant enough.”

Well, looks like Finnur is sport on!