Lower plot prices boost sales as Faroese home prices hit records

Sunda Municipality has sold 25 building plots this year after cutting prices, while home sales are also strong across the Faroe Islands and residential property prices have reached record levels, according to KVF.

The municipality sold two plots last year. Since December, however, it has sold 25 plots in different parts of the municipality after reducing the price from 795 to 495 kroner per square metre.

Mayor Eyðstein Zachariasen told the radio service that the price cut had come at a cost, but that losing residents would have been more expensive. The municipality has now gained more residents, he said.

Sunda Municipality applies the same general price to plots throughout the municipality rather than setting different prices for individual plots. Only a few plots remain, and the municipality plans to develop new residential areas in all of its villages, Zachariasen said.

Home prices vary sharply

The director of real estate agency Skyn said home sales are also going well in the Faroe Islands. Unlike the building plots in Sunda Municipality, however, residential property prices are higher than ever.

Prices differ significantly across the country. In the Tórshavn area, a house cost an average of 4.9 million kroner in the third quarter of this year. In larger villages and towns, the average price was 2.6 million kroner, while houses in Sandoy and Suðuroy cost an average of 1.7 million kroner.

Although prices have risen throughout the country, they have not increased equally for all types of homes. Prices in the Tórshavn area have risen by 11 per cent, while apartment prices in the central region have increased by 8 per cent. Across the country, price increases range from 1 to 5 per cent.

Age also affects prices. In larger villages and towns outside Tórshavn, prices have risen by only 1 or perhaps 2 per cent, but prices for newer homes have increased by as much as 20 per cent. This indicates that buyers are paying more for homes they consider to be of good quality, the Skyn director said.