Real Estate Sales Nearly Double, Rent Prices Rise

architecture downtown Reykjavík houses

Real estate sales in Iceland nearly doubled between January and February of this year, according to the latest report from the Housing and Construction Authority. The jump is most noticeable in municipalities near the capital area. In Reykjanesbær, not far from the evacuated town of Grindavík, the number of sales tripled between January and February.

Rental prices rise

In Akranes, just one hour north of Reykjavík, the number of real estate sales more than doubled, while in Árborg, South Iceland, they nearly doubled. Rental prices also rose faster than general price levels, according to the report. This was especially true on the Suðurnes peninsula, where Grindavík is located, where rental prices are 16% higher now than they were in September 2023. Rental prices rose 3-9% in the capital area during the same period.

675 Grindavík properties wait for government buyout

The town of Grindavík (pop. 3,600), located on the Suðurnes peninsula, was evacuated in November 2023 due to seismic activity. The town has since seen four volcanic eruptions just to the north, in the Sundhnúkagígar area. Three houses were destroyed in the January eruption and the Government has since offered to buy homes from Grindavík residents if they choose.

On April 12, the first such purchase was approved, and 675 others were waiting to be processed. For comparison, an average of 625 real estate purchase contracts were registered in the capital area and neighbouring municiaplities each month last year. This means that the property purchases of Grindavík residents who are relocating could equal the region’s total monthly demand.

Grindavík residents say the government buyouts are proceeding too slowly, impacting their ability to relocate in the heating-up housing market. They have called a protest for this afternoon in front of Alþingi, Iceland’s Parliament.

Reykjanes Avoids Frost Damage

reykjanes eruption at sundhnúk february 2024

Very little or no frost damage seems to have occurred in Reykjanes peninsula buildings after lava from the February 8 volcanic eruption damaged a hot water pipeline. Both homes and industrial properties were without water for days while work on a new pipeline took place.

According to an inquiry, no reports of frost damage were sent to the distribution company HS Veitur, to the Natural catastrophe insurance of Iceland, or to insurance companies TM, Sjóvá or VÍS. No frost damage occurred at any institutions of the Reykjanesbær municipality.

A concerted effort

Páll Erland, director of HS Veitur, said that even though assistance was requested in multiple houses, no frost damage has been reported. He told that this could be considered a miracle, especially after days of no hot water available for heating. He said that some damage could come to light later on, especially now that hot water is being returned to the system. “This looks very good, however, as it stands today,” Páll said.

Páll added that success during this challenging time is owed to Reykjanes residents who obeyed electricity use guidelines during the hot water outage. The Department of Civil Protection and Emergency Management has dispatched a team of plumbers over the last few days to help HS Veitur secure hot water flow to Reykjanes buildings. Tanker trucks were also sent from neighbouring Hafnarfjörður, delivering 1,800 tonnes of hot water to the area.

Insurance cases avoided

Frost damage due to a lack of hot water falls through the cracks of both traditional insurance and natural catastrophe insurance. It was therefore important for residents of Reykjanes to avoid frost damage after the hot water pipeline was damaged by lava flow.

Fatal Accident in Reykjanesbær, Investigation Underway

Small boat fishermen crowd the Arnarstapi harbour each summer for the coastal fishing season

A fatal workplace accident occurred yesterday at Fitjabraut in Reykjanesbær, Vísir reports. An investigation is currently underway.

Reports of a loud explosion

Yesterday morning, a fatal workplace accident occurred at Fitjabraut in Reykjanesbær. Vísir reports that police received a call about the incident at 11:27 AM, and emergency services quickly arrived at the scene.

“The responders confirmed upon arrival that the accident was fatal. An investigation is currently ongoing, and further details are not available at this moment,” stated the Suðurnes Police.

Vísir’s sources indicated that a loud explosion was heard at the time of the accident. Fitjabraut, where the incident took place, is mainly an industrial area located near Reykjanesbær’s harbour.

Large Fire in Reykjanesbær

fire in reykjanesbær

A fire broke out in an industrial building at the corner of Víkurbraut and Hrannargata in Reykjanesbær today.

Vísir states that all Reykjanes Fire Department vehicles have arrived at the scene, and firefighting efforts are underway.

The fire is in a building located at Víkurbraut 4, an industrial building from 1973. The building is not in current use, but was used previously as a storage site for Icelandair.

The extent of damage to the building is uncertain at this time. Jón Guðlaugsson, the chief firefighter at the South Peninsula Fire Department, stated to Vísir that the fire is confined to this building, and no one is inside.

“It is progressing slowly and steadily. We have been able to make significant progress in controlling it,” stated Jón. “The roof is starting to collapse in parts… Most of the supports are giving way.”

No further information is available at this time.

Reykjanesbær to Accept 350 Refugees

refugees iceland

Guðmundur Ingi Guðbrandsson, Minister of Social Affairs and Labour Market, Kjartan Már Kjartansson, Mayor of Reykjanesbær, and Nichole Leigh Mosty, Director of the Multicultural Center, have signed an agreement to accept 350 refugees in Reykjanesbær.

Together with PM Katrín Jakobsdóttir and representatives from the municipal council, they worked to coordinate a plan for accommodating a number of refugees in the coming year, in line with several other recent agreements in Reykjavík, Árborg, and Akureyri.

See also: Reykjavík Commits to Accepting 1,500 Refugees Next Year 

The agreement was signed Monday, January 9, at Reykjanesbær town hall.

The agreement will apply to people who have received asylum status or residence permits on the grounds of humanitarian reasons. The goal of the agreement is to ensure a standardized reception of refugees across municipalities.

Kjartan Már Kjartansson, mayor of Reykjanesbær,  said in a statement: “There is a lot of accumulated knowledge and experience in these matters in Reykjanesbær, which is important to continue using. Reykjanesbær is ready to share this knowledge with all the municipalities that plan to participate in this important project. In light of the new emphasis and the increased cooperation between the state and municipalities on the coordinated reception of refugees, it was decided to formalize a new agreement between Reykjanesbær and the Ministry of Social Affairs and the Labour Market. Reykjanesbær encourages all municipalities to show social responsibility and take part in welcoming displaced people.”

Reykjanesbær has been working in coordination with national authorities for many years on accepting refugees, in addition to participating in a pilot project for the standardized reception of refugees.

Also discussed was a framework for accepting unaccompanied children, the amount of which has grown in recent years.



Incident Involving Refugee and Son Ejected from Bus Sparks Outrage

public bus Reykjavík

An account of a refugee and his son being prevented from boarding a Strætó bus from Reykjavík to Keflavík on Friday evening has invoked a public outcry and garnered a great deal of attention, both on social media and from community leaders, Vísir reports. Nichole Leigh Mosty, director of the Multicultural Information Centre, says the story isn’t surprising, and that cultural sensitivity training is important for people in service jobs who deal with diverse populations.

Refused to let another passenger pay fare

According to a public Facebook post published by Joana Diminiczak, a man and his young son boarded a Strætó 55 bus at the University of Iceland stop at 6:31 PM on Friday. The man attempted to use the payment card provided for him by the municipality of Reykjanesbær, but the card didn’t work. The driver told him he had to pay his fare out of pocket and began to berate him in front of the other passengers. The man called someone and handed the phone to the driver, who said that “‘these refugees’ never want to pay,” wrote Joana in her post, “they bring useless cards and he’s not a charity, he does his job, and wants to finally go home and have his dinner.” Joana continued, saying that the driver then turned to the man and said in English, “I live in Njarðvík [one of the towns that comprises Reykjanesbær]. I’ll find you.”

At this point, Joana said she attempted to intercede and pay the fare for the man and child, but the bus driver refused, saying he had called the police. “I ask him to call the police [back] and say the matter is resolved because I will pay for them, but he didn’t want to do it. When I say that I can call so he doesn’t have to, he still doesn’t want to let me pay!!! The man gives up, takes his son, and they get out. He looks up at the sky, near tears, but still with hope in his eyes of sparing the boy the humiliation, and says, ‘He watches us.’ We pull out and the bus driver proudly calls the police and says that he is no longer in need of assistance.”

Joana then concluded her post, writing, “Such drivers shouldn’t be driving buses. I hope that Strætó takes this matter seriously.” At time of writing, the post had received 202 largely sympathetic and outraged comments, many of which called on Strætó to address the situation. It had been also been shared around 1,400 times.

‘They need training in how to deal with this diverse group of customers’

When contacted for comment, Nichole Leigh Mosty, director of the Multicultural Information Centre, said the story did not surprise her. “I wasn’t surprised, because I know there have been difficulties implementing the Klappið app [Strætó’s payment app]. It isn’t designed for diverse members of society, for foreigners or senior citizens. And we’ve seen this behaviour from employees over and over. It’s a stressful job, but the fact that they are serving a diverse community means that they need training in how to deal with this diverse group of customers. But don’t make such prejudicial statements and [provide] poor service.”

Nichole says that cultural sensitivity training is vital. “Whenever we have people in a service position, cultural sensitivity is needed considering that there are all sorts of people who use public transportation. And those who are serving them need to be able to treat everyone who uses that service with respect.”

‘It’s very clear that we’ll be looking into what went on there’

Strætó’s director Jóhannes Svavar Rúnarsson told reporters that he wasn’t familiar with the situation himself, but that the case has been referred to the Icelandic Road Administration, which services bus lines that run outside of the capital area. However, at time of writing, Bergþóra Kristinsdóttir, manager of the Road Administration’s service department, said that she was not familiar with the situation either.

“It’s not a nice story. It’s not come across our desk, I’ve not received any other information about this incident. But it’s very clear that we’ll be looking into what went on there,” said Bergþóra.

Arion Bank and PCC Conclude Talks Over Sale of Silicon Plant

Stakksberg Silicon Plant Helguvík.

Arion Bank and PCC BakkiSilicon have concluded their talks over the sale of the silicon plant in Helguvík.

The fate of the Reykjanes silicon plant has been up in the air since the 2018 bankruptcy of former owner United Silicon, with many local residents concerned about the environmental impact of the facility. In wake of the talks ending, Arion Bank has cancelled the utility contract with Landsvirkjun, most likely meaning that the plant is now slated to be repurposed or possibly relocated.

Since the bankruptcy, extensive renovations to the plant were planned, with increased sustainability a major priority. There has been some interest in investors acquiring the plant, and Arion Bank has looked for potential buyers with experience in the industry.

Since the beginning of this year, Arion Bank has been in talks with PCC, an international silicon manufacturer with a facility in Bakki, near Húsavík in North Iceland. The PCC facility is also notable for its use of green technologies and has existed alongside the Húsavík community without problems.

PCC is said to have presented ambitious renovation plans for the Helguvík plant, but despite this, talks have fallen through, and Arion is now looking to sell and repurpose the facility.

Benedikt Gíslason, director of Arion Bank, stated to Vísir: “The story of the Helguvík silicon plant is well-known. We consider it our duty to make the best use of the infrastructure and everything that has been invested into it. We’ve looked to all stakeholders, including the residents of Reyjanesbær, who were negatively impacted by its operation.”

Read the official statement from Arion Bank here.

Municipalities Struggle to Provide Housing, Employment for Refugees

Three municipalities are struggling to provide adequate services, housing, and job opportunities to recently arrived refugees as the number of individuals far exceeds initial agreements. RÚV reports that only three municipalities—Reykjavík, Hafnarfjörður, and Reykjanesbær—currently have arrangements with the government to receive and provide for refugees, although it’s hoped that more municipalities will soon participate in resettling schemes.

Reykjanesbær and Hafnarfjörður are particularly struggling to provide for the number of refugees now living in their municipalities. There are currently 243 refugees living in Reykjanesbær, where the original agreement was for 70. Meanwhile, 270 refugees currently live in in Hafnarfjörður, which only expected to receive 100. Reykjavík agreed to receive and provide for 220 refugees but is currently home to 356.

The Directorate of Labour took over service provisions for refugees on July 1. It now provides housing, a weekly allowance, necessary healthcare, and transportation for recently arrived refugees. Gísli Davíð Karlsson, the Directorate’s Manager of the Department of General Services, says the transfer of refugee services went off without any major problems. But even so, once these individuals have had their applications for asylum approved, they may face waits of up to eight weeks to complete the resettlement process with the Directorate of Labour. And Gísli Davíð says the general lack of housing is causing considerable delays and problems.

“The housing situation is difficult, and we’ve really felt it,” said Gísli Davíð. “Yes, we managed to sort out housing this spring when there was an increase, but the housing market has become a lot more difficult in terms of possible housing for these groups of people because not all accommodations are suitable. Now the challenge—for local municipalities, too—is what housing is available? Where can we accommodate people through the winter? I wouldn’t say we’re bursting at the seams yet, but there’s a decent strain on the system.”

The Directorate of Labour has a ‘Support for Refugees’ page on its website (in English), where it provides information both for refugees themselves regarding recruitment grants, job counselling, and education, as well as for local employers who are looking to hire refugees. Those with available work opportunities are encouraged to email the Directorate at flottamenn[at]

Advanced Polls Busy as Municipal Elections Approach

Reykjavík City Hall ráðhús

More residents have voted in advanced polls for the upcoming municipal election than in the last election, in 2018, Vísir reports. Amendments to election legislation that took effect this year require all parties to announce their candidacy before advanced polls open. The amendments have had varying effects on the May 14 election, including enabling more foreign residents to vote and making it more difficult to man polling stations.

“So far today we’ve had 421 people vote here at the District Commissioner of Greater Reykjavík and since [advanced polls] opened, 2,800 have voted, and 4,063 across the whole country,” District Commissioner Sigríður Kristinsdóttir stated. There have already been more advanced voters in the capital area this election than in the entire country preceding the last election, in 2018. The advanced polling station for the capital area is open daily in the Holtagarðar shopping centre from 10:00 AM to 10:00 PM. On election day, the station will be open between 10:00 AM and 5:00 PM for voters whose registered address is outside the capital area.

Many electoral committees not fully staffed

The new election legislation has made it difficult to staff electoral committees, particularly in smaller municipalities, RÚV reports. A new rule states that committee staff members may not appear as supporters on the election lists of campaigning parties. In many municipalities, this has ruled out a majority of election committee staff, who are scrambling to find replacements. The fact that the election falls on the same day as the 2022 Eurovision Song Contest final has reportedly also made staffing polling stations more difficult.

40% of voters are immigrants

Before this year, most foreign citizens living in Iceland had to wait five years before they could vote in municipal elections. The new legislation has shortened that period to three years, with Danish, Norwegian, Swedish, and Finnish citizens whose legal residence is in Iceland can vote regardless of how long they have lived in the country.

The amendment has led to some large shifts in voter demographics, for example in Mýrdalshreppur, South Iceland, where 42% of eligible voters are immigrants. The proportion is around one third in Skaftárhreppur and Súðavíkurhreppur, and around one quarter in Reykjanesbær, Southwest Iceland. In an effort to reach voters who may not speak Icelandic, more political parties have created materials in English and Polish and held campaign meetings in English.

The Multicultural Information Centre provides comprehensive information about municipal elections in English on its website.

Residents and Local Council Oppose Silicon Plant Reopening

Stakksberg Silicon Plant Helguvík.

Arion Bank has plans to sell the silicon plant in Helguvík, Southwest Iceland, to PCC BakkiSilicon. The two parties have signed a statement of intent for the sale. Kjarninn reports that both residents and municipal authorities oppose the reopening of the plant. The plant opened in 2016, but was quickly plagued by operational troubles and ultimately went bankrupt amidst widespread community outcry over the environmental and health impact it was having on the surrounding communities. 

“The Municipal Council of Reykjanesbær has repeatedly expressed its views on the operation of the silicon plant to Arion Bank,” local councillor Friðjón Einarsson stated, adding that there is opposition both among residents and local councillors to opening the plant. “We have formally requested to work with with the bank to dismantle the plant and start collaborating on developing employment in Helguvík. Unfortunately, that has not happened.”

Arion Bank has drawn up plans to renovate, reopen, and expand the plant. The Icelandic National Planning Agency (Skipulagsstofnun) released a report on those plans on December 31, 2021, which stated that the changes would likely reduce malfunctions at the plant, a repeated issue when the plant was still in operation. The report also stated that while the renovations would lessen the plant’s impact on air quality, the impact would still be negative in the first phase of operation and quite negative if all four ovens were to operate at once.

Read More: Emissions Will Increase by 10% if Plant Reopens

“We will try everything we can to stop the reopening and will continue to ask the bank to halt [its plans],” Friðjón stated. “In my opinion, the bank has no right to do this and it’s really unbelievable that the bank isn’t listening to the area’s residents.” He points out that it was Arion Bank that funded the plant, a project that “failed miserably and [the bank] thus holds a lot of responsibility for how it went.” Friðjón says Reykjanesbær authorities have heard there is interest from abroad in buying the plant, dismantling it and exporting its parts abroad. Friðjón says local authorities have told PCC BakkiSilicon that the local residents have no interest in their purchase and reopening of the plant and will fight against it.