Cost of living in Reykjavik

Iceland, like a host of other Nordic cities, can be quite expensive, due in part to that fact that, because of the cold climate, they must import a lot of the fruits and vegetables that they cannot grow.

Numbeo's Cost of Living Index ranks Iceland as the third most expensive country on the planet. Some of the necessary costs for tourists traveling to the area have also been studied by local banks. It was found that to stay in hotels in Reykjavik is 10-32% more expensive than in other Nordic capital cities. To dine out in a restaurant, the prices in the city are higher by 44% than the European Union average. But where the prices really hit the roof is with alcoholic beverages, with costs of 123% more than the average.

Therefore, you should really look at your budget before committing to living in Reykjavik. Registers Iceland states that for minimal essentials, the typical resident in Iceland must have a budget of at least 1,500 €. But keep in mind that living costs can vary, and the necessities for students may not always be taken into consideration with certain averages.

Housing costs

Unfortunately, the problem of over-priced lodging also exists for the residents of Reykjavik, and not merely for the visitors, whether they be tourists or incoming students looking for housing. In fact, many find that the problem is on the rise, seeing that a portion of the community, who own the properties, is making it almost impossible for the current generation to invest in the purchase of a home, keeping them stuck in the continuous rental cycle.

Rent Benefits

Here is a little bit of good news. After you apply for a social security number in Iceland, you may then apply to receive Rent Benefits. However, the catch is that you must first live in Reykjavik for at least six months. But, if you plan on staying for more than one semester, this can assist in lowering the rental costs of accommodations for tenants who are on fixed or lower incomes.

Rent

  • Student Housing: €600 to 800
  • Private Housing - Single Room: €700-1000
  • Private Housing - Apartment: €1000-1800
  • Utilities (may be included): €130

Food costs

Recently, the country of Iceland has really started putting its dining options on the map, with a variety of world-renowned restaurants opening, especially in the downtown area of Reykjavik. There are now many more possibilities when it comes to finding a place for a good meal, whether you are looking for traditional Icelandic foods, more exotic options or to splurge at a fine dining establishment.

As you may have guessed, eating out at a restaurant in Iceland can get rather pricey, with the average dish costing between €16 and €30. Therefore, you’ll find that the locals mostly eat out for special occasions, or for a much-deserved reward.

So, if you were planning to eat all of your meals at restaurants, you’d best have a very large budget to spend on food. Perhaps you should follow the approach of the locals, and reserve restaurant meals for a special treat, and not for the norm. You’ll find that dining out in Iceland is quite an experience, so it will definitely feel like a grand adventure!

However, if you find that you must grab a meal while out or between classes, try to take advantage of specials that are served only during lunch. In the heart of Reykjavik, you may also find that some restaurants offer two-for-one specials during certain hours.

Yet, if you want to spend more of your budget on entertainment rather than on meals, get together with some of your classmates or roommates and prepare your food at home. You’ll save money, as well as get to spend some time with your new friends.

Transport costs

Transportation is Reykjavik definitely offers a lot of possibilities, but as with anything in this city, you really must watch the prices. For example, do not take a taxi unless absolutely necessary, and then, only travel a short distance. The rates begin at €5, with a quick-running meter to easily double that fee within minutes. Some visitors new to the city might make the mistake of taking a taxi to get from the KEF Airport into the city, which can be very expensive. Instead, you should definitely take the Flybus, at a much lower rate.

But if you’re well-researched, Reykjavík offers plenty of other ways to get around, especially when you’re on a student’s budget. In fact, Strætó, the public bus service, offers a fare of just €3.60, with unlimited use for an hour.

But if you’re outside of the city, you will find that the public transportation options decrease dramatically. The public transportation system outside of the capital, however, is quite lacking. Renting a car for the day will always cost you less than the numerous bus exchanges.

Below are a few transportation examples:

  • Monthly ticket for public transport: 11,362 ISK or €93
  • Taxi trip on a business day for 8 km.: 3,265 ISK or €27

Other Costs

Shopping

You might have already suspected that Iceland is not the home of discount shopping, and you are exactly right. While it is manageable to live in Iceland on a budget, as long as you really watch what you spend, going on a shopping spree is another thing altogether.

Clothing and accessories in Iceland come along with very high price tags and taxes that are just through the roof. For example, a pair of jeans made by Levi will be about 40% more than in the UK or a Scandinavian country.

So, it’s best to bring your clothing from home. Or many residents shop primarily online, or they travel to the large shopping centers in Berlin or Copenhagen. You can also watch for sales at the local shopping malls, such as Kringlan or Smáralind.


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