Grindavík Homecoming Unlikely in the Near Term

Photo from the mandatory evacuation of Grindavík in Reykajnes

The town of Grindavík has suffered significant earthquake damage, impacting homes and infrastructure. The Head of the Department of Civil Protection and Emergency Management told reporters yesterday that the ongoing uncertainty regarding a possible eruption means that it is unlikely that Grindavík residents will be able to return to their homes in the near future.

More damage than expected

The town of Grindavík, on the Reykjanes peninsula, was succesfully evacuated during the early hours of Saturday, November 12, amid concerns that the intrusion of magma, believed to extend beneath the town, would reach the surface. An emergency phase was declared, and the Red Cross set up three emergency relief centres.

The quakes continued into Saturday. By Sunday, it was clear that major damage being inflicted on the the town, affecting houses, roads, and infrastructure. “The town has suffered extensive damage,” Úlfar Lúðvíksson, Chief of Police in Suðurnes, told RÚV during the evening news yesterday.

Parts of the town have been without hot water and electricity owing to damage to the distribution system of the HS Veitur utility company. Large parts of Grindavík have been too hazardous to enter, and HS Veitur has not allowed its employees to venture into those areas for repairs.

New assessment expected tomorrow

A new assessment from the Icelandic Meteorological Office is awaited and expected to be published tomorrow. The new assessment will provide a clearer picture of the situation, including whether the magma is still rising and how close it has risen to the surface.

Seismic activity has, however, significantly decreased since Friday and Saturday. “There is nothing to suggest that there will be a significant eruption,” Magnús Tumi Guðmundsson, a professor of geophysics, told reporters yesterday, noting that he believes the likelihood of an undersea eruption has diminished.

Unlikely that residents can return soon

Despite a decrease in seismic activity, it is unlikely that Grindavík residents will be able to return to their homes in the near future – even if a volcanic eruption does not occur in the next few days.

Víðir Reynisson, Department Manager of the Department of Civil Protection and Emergency Management, told RÚV yesterday that events were still unfolding, and even if seismic activity continued over the two weeks without an eruption, the evacuation would remain in effect: “Even if the activity completely stops, and scientists believe that this event is over, it will take some time before we can be certain that this activity will not pick up again. Only then will residents be allowed to return home,” Víðir explained.

Víðir also noted that if an eruption occurs that is far from Grindavík, the evacuation would continue to be in place; such an eruption could last for some time.

Admitted into the safest neighbourhood

Residents of the Þórkötlustaðahverfi neighbourhood in Grindavík, in the easternmost part of town, were afforded a brief window (ca. 5 minutes) to retrieve their belongings and pets yesterday. One resident, having received help from two Keflavík residents, managed to retrieve 66 animals: 35 sheep, 20 hens, and a cat.

The organisation Dýrfinna has collected information about animals left behind in Grindavík, which include 58 cats, 2 rabbits, 2 hamsters, 49 horses, 50 chickens, 13 parrots, 130 pigeons, 204 sheep, and 15,000 chickens. Despite hoping that they would be allowed to enter Grindavík to rescue pets, the authorities refused to admit anyone into the town, aside from residents of the Þórkötlustaðahverfi neighbourhood.

Decisions made tomorrow morning

Once a new risk assessment is available tomorrow morning, a decision will be made regarding the next steps. “We are doing what we can to accommodate the people of Grindavík, allowing them to access essential items in their homes,” Úlfar Lúðvíksson told RÚV yesterday.

More Housing for Sale and Slower Turnover Rate

iceland real estate

The number of apartments and houses for sale in Iceland continues to grow, particularly due to a longer turnover rate but also because more new apartments are entering the market. The latest monthly report from the Housing and Construction Authority states that there are currently around 1,800 homes for sale in the capital area, an increase of 300 over the past three months. The proportion of apartments sold under asking price is increasing while those sold over asking price are decreasing.

Few apartments sell within 30 days

Only 9.7% of apartments for sale in the Reykjavík capital area in mid-April were sold 30 days later. The proportion has not been so low since 2020 (with the exception of the period around Christmas and New Year last year), when the supply of apartments was significantly higher. When the apartments in the top 25% of the price range were considered, less than 5% were sold 30 days later.

In April 2023, 531 apartments were sold in the entire country, a drop from the 610 sold in March. The three-month sale average has dropped slightly following relative stability over the preceding five months. Only 321 sales were made in the capital area, lower than at any time since February 2011. Between April and May, residential real estate prices increased by 0.7% in the capital area, with apartments increasing by 0.3% and detached homes increasing by 1.9%, representing a slow down in price hikes.

Unindexed mortgage rates break the 10% barrier

Iceland’s banks have responded to inflation by raising rates, and variable unindexed interest rates on first mortgages are now in the range of 10.25%-10.50%. Interest rates have not been as high since the Housing and Construction Authority began collecting data on them at the beginning of 2010, and possibly not since such loans had any significant share of the market. Net new housing loans to households decreased in number, continuing an ongoing trend.