The ‘Town in the Lava’ rests on a 7000-year-old flow and hides a parallel elfin universe, according to locals. Its old tin-clad houses and lava caves are worth a visit on a sunny summer’s day, but in winter, unless the Christmas market is on, tumbleweeds roll.
Hafnarfjörður was once a major trading centre, monopolised by the British in the early 15th century, the Germans in the 16th and the Danes in the 17th. Many of the finest houses in town once belonged to rich merchants. Today the town is spreading like spilt milk, but the endless new-building estates east of the harbour hold little of interest for visitors.