Iceland is One of the Most Expensive Countries in the World to Live in. Here’s Why.

Icelandic Farm House
Icelandic Farm House | © Matito / Flickr
Camille Buckley

Iceland is the 9th most expensive country in the world to live in, according to Numbeo. The reasons for this are multifold. Let us take you through it.

Firstly, labour itself is expensive with a lot of mandatory overhead. Secondly, farming in Iceland is tightly regulated with importation of many agricultural products forbidden and price controls on local products. The equipment needed to run a farm has to be imported, making Icelandic farms costly. Other factors, such as a growing tourism industry that circulates around the city centre, has made rent prices for locals out of proportion. Here are some statistics comparing some expenses in Reykjavik with notoriously expensive European capitals such as London and Paris, as well as Tokyo.

Famous Reykjavik Hot Dog Stand

Restaurants

Eating out in a cheap restaurant in Reykjavik costs £14 (2,000 ISK). That same meal in London would cost you £15, £7 in Tokyo, and £12 in Paris. The difference is not so much, except for when you try a three-course meal at a mid-range restaurant for two persons: in Reykjavik, £85 (12,000 ISK); in London, £52; in Tokyo, £34; in Paris, £49. Having a cappuccino in a cafe in Reykjavik is more expensive than all three cities, but barely: for a Reykjavik cappuccino you pay £3.81 (536 ISK). In London you pay £2.71. In Tokyo you pay £2.60, and in Paris you pay £3.

While Iceland is a remote island in the North Atlantic, many things have to be imported, which can obviously be expensive. A litre of milk in London will cost you £0.91 (128 ISK), and only slightly more in the other cities. One kilogram of rice in London will cost you £1.56, in Reykjavik it’s £2.23 (313 ISK), in Tokyo it’s £3.72, and in Paris it’s £1.88. A kilogram of local cheese in London will cost you the least of all cities at £5.68 (800 ISK), while it’s slightly more in Tokyo at £11. In Reykjavik it’s £12.29, and in Paris, with its notorious cheese lovers, the price is at £16.63.

Transportation

In Iceland, there are no trains (yet), so public transportation consists of buses and taxis. For a monthly bus pass in Reykjavik you will pay £84 (11,875 ISK), whereas in London you will pay £132, much more expensive than both Tokyo and Paris, which costs about £63. The price for an initial taxi ride is similar in all cities at around £4 (600 ISK). To buy a Volkswagen Golf costs the most in Reykjavik at £24,144 (3,400,000 ISK), whereas the same car would cost you £20,000 in London, £17,000 in Tokyo, and £18,600 in Paris.

Iceland

Utilities

This is the one area in which Iceland really cuts the consumer price index some slack because of the inexpensive geothermal heating that circulates the city’s infrastructure. In Reykjavik, you can pay basic utilities in an 85 sq. meter apartment for £90 (12,700 ISK), whereas in London you will pay £138, while it’s at £144 in Tokyo, and £125 in Paris. The cost of internet, however, is more expensive in Reykjavik at £48 (6,715 ISK) per month compared to London, Tokyo, and Paris, which all average about £28.

Rent

To rent one bedroom in the city center of London costs £1,608 per month, while in Reykjavik that same bedroom costs £1,341 (189,000 ISK) per month, then £982 in Paris, and £750 in Tokyo. A three-bedroom apartment outside the city center of London costs £2,000 while in Reykjavik you would pay £1,715 (241,515 ISK), a little less than in Paris at £1,480, and much more than in Tokyo at £981.

Since you are here, we would like to share our vision for the future of travel - and the direction Culture Trip is moving in.

Culture Trip launched in 2011 with a simple yet passionate mission: to inspire people to go beyond their boundaries and experience what makes a place, its people and its culture special and meaningful — and this is still in our DNA today. We are proud that, for more than a decade, millions like you have trusted our award-winning recommendations by people who deeply understand what makes certain places and communities so special.

Increasingly we believe the world needs more meaningful, real-life connections between curious travellers keen to explore the world in a more responsible way. That is why we have intensively curated a collection of premium small-group trips as an invitation to meet and connect with new, like-minded people for once-in-a-lifetime experiences in three categories: Culture Trips, Rail Trips and Private Trips. Our Trips are suitable for both solo travelers, couples and friends who want to explore the world together.

Culture Trips are deeply immersive 5 to 16 days itineraries, that combine authentic local experiences, exciting activities and 4-5* accommodation to look forward to at the end of each day. Our Rail Trips are our most planet-friendly itineraries that invite you to take the scenic route, relax whilst getting under the skin of a destination. Our Private Trips are fully tailored itineraries, curated by our Travel Experts specifically for you, your friends or your family.

We know that many of you worry about the environmental impact of travel and are looking for ways of expanding horizons in ways that do minimal harm - and may even bring benefits. We are committed to go as far as possible in curating our trips with care for the planet. That is why all of our trips are flightless in destination, fully carbon offset - and we have ambitious plans to be net zero in the very near future.

Culture Trip Spring Sale

Save up to $1,100 on our unique small-group trips! Limited spots.

X
Edit article