For investors with long-term ambitions and a strong vulture instinct, the property market in Iceland is gearing up to be the sale of the century. The meltdown of the country's banks and the collapse of the Icelandic kronar has hit hard.

Worst off are home-owners with the two most common types of home loans, domestic indexed and foreign currency based. Almost overnight they are living in properties they can no longer afford with no buyers in sight. But one man's misfortune is another's opportunity. "For people from abroad, bringing in foreign currency, the time to buy is now," said Geir Hardarson of property website Habil.is. He says sellers will offer significant discounts for sales in foreign currency.

The desperation discount factor in the market varies, starting with 10 per cent off for Polish emigrants anxious to return home up to sizeable savings from developers with empty units. "In new areas close to Reykjavik, a contractor was selling units for 35 million kronar (€230,000)," said Mr Hardarson. "A union representing disabled people with cash from the state lottery bought three for 25 million (€166,000) each, around 30 per cent down."

As winter looms, investors can look forward to bargain basement prices at upcoming foreclosure auctions. "We build strong houses in Iceland," said Mr Hardarson. "They keep their value for a very long time." Hmmm, you would have to wonder about that.