The Cost of Living in Iceland | An Expert Guide

Iceland, a Nordic island nation known for its stunning natural beauty and high standard of living, consistently ranks among the world's most expensive countries. With a population of approximately 364,000 people, Iceland combines modern infrastructure with pristine wilderness, making it a unique but costly destination for expatriates.

Iceland's economy is driven by tourism, renewable energy, fishing, and technology sectors. The country's isolated location and small population contribute to high import costs, while strong social policies and high wages support one of the world's highest living standards. Recent years have seen significant economic growth, particularly in the tourism and technology sectors.

The expatriate community in Iceland is relatively small but growing, concentrated primarily in the Greater Reykjavík area, which houses about two-thirds of the country's population. Many are drawn by career opportunities in tech, education, and tourism sectors, despite the high living costs and challenging weather conditions.

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Regional Comparison

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Housing Costs in Iceland

Housing costs in Iceland are substantial, particularly in Reykjavík and surrounding areas. In central Reykjavík, a one-bedroom apartment typically rents for 200,000-280,000 ISK monthly, while similar accommodations in outer areas range from 160,000-220,000 ISK. Other towns offer somewhat lower prices, though the difference is often less significant than expected. Most rentals require three months' deposit and competition for good properties can be intense.

Summary:

• Rent, 1-bedroom apartment (central Reykjavík): 200,000-280,000 ISK/month
• Rent, 1-bedroom apartment (outer Reykjavík): 160,000-220,000 ISK/month
• Rent, 1-bedroom apartment (other towns): 140,000-200,000 ISK/month

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Food Costs in Iceland

‍Food expenses in Iceland are among the highest in Europe due to the country's reliance on imports. A meal at a casual restaurant costs 2,500-4,000 ISK, while dinner at an upscale restaurant might run 6,000-12,000 ISK per person. Monthly grocery shopping at stores like Bónus or Krónan typically costs 60,000-80,000 ISK for one person. Shopping at discount supermarkets and choosing local products can help reduce costs.Summary:

• Casual restaurant meal: 2,500-4,000 ISK
• Upscale dinner: 6,000-12,000 ISK
• Monthly groceries (1 person): 60,000-80,000 ISK

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Transportation Costs in Iceland‍

Public transportation in Reykjavík is provided by Strætó buses, with a monthly pass costing around 16,000 ISK. Single journeys cost 490 ISK. Many residents own cars due to the challenging weather and limited public transport options outside the capital, though vehicle costs are high due to import duties. Taxis are expensive, with a 5km journey typically costing 3,000-4,000 ISK.Summary:

• Bus monthly pass: 16,000 ISK
• Single journey ticket: 490 ISK
• Taxi (5km journey): 3,000-4,000 ISK

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Healthcare Costs in Iceland

‍Healthcare in Iceland is primarily public and heavily subsidized for residents. Those registered in the system pay reduced fees for services, with a consultation at a health center costing around 1,000-1,500 ISK. Private health insurance, which some expatriates choose for additional coverage, typically costs 15,000-30,000 ISK monthly. Dental care is not covered by the public system and can be expensive.Summary:

• Public healthcare visit: 1,000-1,500 ISK
• Private health insurance: 15,000-30,000 ISK/month
• Dental check-up: 15,000-25,000 ISK

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Utility Costs in Iceland‍

Utility costs in Iceland benefit from abundant geothermal energy, though overall costs remain significant. Monthly utilities including electricity, heating, water, and garbage collection typically range from 15,000-25,000 ISK for an apartment. Internet service costs 6,000-10,000 ISK monthly for high-speed connections. Mobile phone plans with data typically range from 3,000-7,000 ISK monthly.Summary:

• Basic utilities: 15,000-25,000 ISK/month
• Internet: 6,000-10,000 ISK/month
• Mobile phone plan: 3,000-7,000 ISK/month

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Example Monthly Expenses in Iceland‍

Average monthly expenses for a single person living in Reykjavík:

• Rent (1-bedroom, decent area): 220,000 ISK
• Utilities: 20,000 ISK
• Food: 70,000 ISK
• Transportation: 16,000 ISK
• Healthcare: Minimal (covered by taxes)
• Internet/Phone: 12,000 ISK
• Entertainment: 40,000 ISK
• Total: 378,000 ISK

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Cost of Living vs Quality of Life Correlation

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If you want to know more about Iceland and the cost of living there you can also check out the Iceland page.