The building cost index compiled in the middle of May 2021 is 154.1 points (December 2009=100), 0.3% higher than in the previous month. The prices of domestic materials increased by 0.7% (effect on the index 0.3%). In the last twelve months the building cost index has increased by 4.4%. In coherence with the Act on the Building Cost Index no. 42/1987, the index applies to June 2021.

Updated legal background for the Building Cost Index from 1 January 2022
On 11 May 2021, the Icelandic Parliament, Alþingi, passed a new law to repeal the current Act on the Building Cost Index no. 42/1987. The repeal will enter into force on 1 January 2022, but until then the current act will continue as the background for the building cost index compilation. Thereafter, the Act on Statistics Iceland and official statistics no. 163/2007 will govern the compilation of the building cost index.

This change conforms the legal background of the index to practices in other Nordic countries, where indices are inherent to general statistical acts instead of special acts on individual statistics.

Furthermore, Statistics Iceland will be able to improve the index methodology. In preparation for the new law, Statistics Iceland aims in particular to implement two methods to the compilation of the index in January 2022 as has already been stated. First, the building cost index will measure building costs excluding value added tax and second, the wage cost in the building index will be measured based on the Icelandic survey on wages, earnings and labour costs (ISWEL).

The upcoming changes will be introduced further later in the year before the entry into force of the new law.