The Ultimate Guide to Downtown Reykjavik

What is the essence of central Reykjavík's allure? What districts make up downtown Reykjavík and how were they formed? What are some of the key characteristics of 101 Reykjavík, its landmarks, streets and its culture? 

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The centres of most world capitals envelope the cultural, historical and geographic heart of their cities. Although one can hardly classify Reykjavík as a metropolitan—its population consists of less than 200,000 people—this northernmost capital in the world boasts an astonishingly vibrant downtown setting that is rich with culture and history.

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• Read about the Music of Iceland here 

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According to legend, Iceland's first settler, Ingólfur Arnarson, threw his high seat pillars into the sea upon first arriving at the island's shores in 870 AD and promised the gods to settle where they eventually drifted ashore.  

It took Ingólfur and his men four years to locate the pillars and the following summer, they built their farmstead in the place he named Reykjavík, the Bay of Smoke.

Photo from Wikimedia, Creative Commons, by Sigfús Eymundsson'

Reykjavík as we know it today, however, started growing around its harbour in the 18th Century, from where it stretched out to different cardinal directions. 

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• Read our more comprehensive article on the History of Reykjavík

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The Old Harbour and Kvosin is where it all began. There, commerce and trade centralised, and consequently, these two neighbourhoods constituted as Miðbærinn or the city centre.

Through this territory, the canal of Lækjargata (Creek Street) served as the border between the trading centre and the countryside.

Photo from Wikimedia, Creative Commons, by Magnús Ólafsson

The area west of the canal became known as Vesturbær (West Town), while the eastern section was named Austurbær (East Town). There, different neighbourhoods arose and evolved.

The central port districts and Austurbær's Þingholtin became homes to merchants and business owners, while neighbourhoods such as Grjótaþorpið and Vesturbær housed the working class. 

Today, the city of Reykjavík has branched out much further than these fundamental distinctions suggest and, therefore, these first suburbs are now considered central. 

The old class divide between districts still lingers in some ways, but all in all, the central city is home to people from all layers of society. But is there something that unifies the residents of central Reykjavík? If so, it might be something as trivial as a three digit number.

101 Reykjavik 

Photo from Private 2 Hour Reykjavik Sightseeing Adventure with Perlan, Grotta & Hallgrimskirkja

101 is the postal code that unifies the districts that make up the downtown area. Although the neighbouring communities of codes 105 and 107 could be described as suburban, they are still easily accessible by foot from the centre and integrally connected to its culture and history. 

As with most urban areas around the world, the density of the population is greatest in this original part of the city. And for the past century, downtown Reykjavík has nursed its very own native; the people we lovingly refer to as Miðbæjarrotta or the "Downtown Rat." 

As nasty as that nickname might sound, it is in no way meant as an insult. In fact, most of the central capital’s permanent residents wear the title with pride.

While the centre is home to an incredibly diverse flock that is impossible to classify as a whole, it has predominantly been known to harbour bohemians, artists, musicians and the eternally young. 

The video at the top of this article shows the trailer for Icelandic director Baltasar Kormákur’s debut feature film, adequately titled 101 Reykjavík. This darkly satirical urban tale tells of a typical downtown rat, Hlynur, a 30-year-old slacker who lives with his mother and spends most of his waking hours getting drunk at Kaffibarinn. 

Photo from Guided Reykjavik Cocktail Tour with 3 Complimentary Drinks & Reserved Tables at 3 Bars

Although this borderline-depressed but beloved character in no way reflects all of the downtown’s residents, the stereotype he encapsulates is very much rooted in the real world; because of skyrocketing housing prices and service costs, the fly-by-night life is the reality of many inner-city dwellers.

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• Check out what Wanda Star has to say about Rising Rent in Reykjavík 

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Due to the incredible tourist boom of the last few years—and the fact that the construction of hotels takes several years—many residents of 101 Reykjavík have been driven out of their homes to make way for guesthouses and Airbnb accommodations.

Although it's getting near impossible for the average folk to afford to live in the centre, for many of us rats, the suburbs are simply not an option. One will never want to leave the downtown if one has ever grown accustomed to the pleasure of calling it home. 

The benefits of living in downtown Reykjavík extend far beyond the corrugated iron roof that's over one’s head. Living here grants the possibility of a lifestyle that's not available anywhere else in the country.

Many of 101 Reykjavík's residents, however, face the reality of moving in and out of sparsely available and overpriced rooms on a regular basis and all means must be taken to preserve this valued way of living, for better or for worse. 

Still, all complaints about the housing situation are eclipsed by the pleasures the central neighbourhoods have to offer. So let’s get to exploring the different streets and districts that make up Reykjavík's City Centre, to allow you to get better acquainted with the history and the culture that are so fundamental to its appeal. 

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Laugavegur, Bankastraeti & Austurstraeti 

 Photo from Wikimedia, Creative Commons, by joseph knecht

The Laugavegur shopping street is where it all begins. Connecting seamlessly with its sister streets Bankastræti and Austurstræti, this route is a pathway of local culture that every visitor to Iceland has to walk at least once; dotted with a myriad of shops, restaurants, galleries, cafés, bars and homes, Laugavegur serves as the very artery of the capital.

What’s more, is that these establishments are often found in the same building. This means that a single house can host a restaurant that turns into a club come nightfall, while the upper levels might be residential apartments. 

The street itself was originally commissioned by the Reykjavík Poverty Committee in 1885, as a means to combat unemployment. With the centre of all businesses in Kvosin, Laugavegur served as the road by which one would reach the industrial harbour town from the countryside. 

Photo from Graffiti and Street Art in Reykjavík 

Consequently, the locals seized the opportunity and started setting up shops and services along the route to catch potential customers before they’d reach the larger stores by the seaside. 

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• See also: Nightlife in Reykjavík

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But when U.S. Armed Forces occupied Iceland at the end of World War II, they created a demand for nightlife and entertainment—and soon enough, bars started popping up downtown, and the locals got to know the benefits of drinking, dancing and eating out. 

Photo from Wikimedia, Creative Commons, by Vera de Kok

Where Laugavegur meets Skólavörðustígur, Bankastræti (Bank Street) begins. Its namesake is The National Bank of Iceland (Landsbankinn) that began its operations at Bankastræti 3 in 1886. 

Today, Reykjavík’s business district is located in Borgartún, while Bankastræti serves as a natural extension of Laugavegur, consisting mostly of shops and restaurants. 

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• See also: The Best Restaurants in Reykjavík

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Past the intersection of Lækjargata, the old canal street, Austurstræti connects the centre artery to Kvosin and the Old Harbour. The street contains most of Reykjavík’s different architecture styles—with everything from the old timber houses of the merchant era and the country’s first concrete buildings, to large modern structures of glass and steel. 

Photo from Wikimedia, Creative Commons, by Jóhann Heiðar Árnason

The name of Guðjón Samúelsson will come up many times over the course of this guide, as he is widely considered Iceland’s most renowned architect, having designed many of Central Reykjavík's most iconic buildings. 

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• See also: The Fascinating History of Icelandic Architecture

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You’ll find one of Samúelsson’s earliest works at Austurstræti 16. This building was the largest in Reykjavík at the time of its construction in 1916, and has served as the headquarters for both The National Bank and the Icelandic Freemasons. 

Today, the restaurant Apótekið is stationed on the ground floor of this grand concrete structure, taking its name from the city pharmacy that operated there from 1930-1999. Today, the spot is one of the finest wining and dining locations in the city.

Another beautiful building of interest is Hressingarskálinn at Austurstræti 20. Now a restaurant and a nightclub, this timber lodge from the early 1800s used to be the home of county depute Árni Thorsteinsson. The residential garden, utilised by the restaurant on sunny days, is home to sizable trees planted by Thorsteinsson himself over a century ago.

Hverfisgata & Skulagata 

Photo from Wikimedia, Creative Commons, by Vera de Kok

Hverfisgata functions as one of the primary streets in Reykjavík City where it stretches from Hlemmur Central down to Lækjartorg Square. Despite its importance as the lane that parallels the main shopping street Laugavegur—as well as including several landmark buildings—most of the street was in a tattered state of decay until very recently.

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• See also: Time in Iceland | A Land of Here and Now

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Hverfisgata's history dates back to 1802 when the foundation of its first abode, called Skuggi (Shadow), was laid. Around this house, others were soon built, and the resulting neighbourhood became known as Skuggahverfið (the Shadow Neighbourhood). 

Photo from piqsels

Up until 2010, the district's roads and houses were in desperate need of repair and the only establishments found were a couple of seedy Adult Stores. Today, however, you'll find the newly paved street dotted with popular clothing stores, elegant restaurants, charming cafés and inviting bistros. 

Hverfisgata deserved this long-awaited makeover, giving its array of marvellous and classical buildings. The dominant example would be the National Theatre, designed, again, by Guðjón Samúelsson. 

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• See also: Top 21 Vegan & Vegetarian Restaurants in Reykjavík 

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Photo from Wikimedia, Creative Commons, by Jóhann Heiðar Árnason

Other buildings of interest include Safnahúsið—an exhibition space constructed in 1906 by Danish architect Johannes Nielsen—and the Danish Embassy, built in 1913 by local merchant brothers Sturla and Friðrik Jónsson. 

But there's plenty more in the area to enjoy than history and grand old houses. At Hverfisgata 12 is the Danish craft beer joint Mikkeller & Friends Reykjavík which is located in a beautiful four-floor building from 1910. 

Photo by Nathan Dumlao

Walk a bit further, and you'll reach the independent cinema house Bíó Paradís—the successor of movie theatre Regnboginn which ran from 1977. You can hunt for records at all-vegan establishment Kaffi Vínyl, before catching a live jazz show in KEX Hostel which is housed in a renovated biscuit factory at Skúlagata 28. 

Hlemmur & Nordurmyri 

Let’s move onto Reykjavík 105, to the edge of downtown. Hlemmur, Reykjavík's central bus terminal, marks the spot where many people feel Laugavegur unofficially ends, although the street technically reaches an additional kilometre east. 

For decades, Hlemmur served as a second home to Reykjavík's outcasts. Because of the terminal’s central location, it sheltered those with nowhere else to go and in the early 1980s, the spot also functioned as a haven for the young runaways of the punk generation.

Photo from Wikimedia, Creative Commons, by Helgi Halldórsson

For decades, this alternative cultural hub seemed stuck in time; run-down, dirty and frequented by the homeless on a daily basis. However, all that recently changed, as the house was renovated and changed into the swanky Food Hall of Hlemmur Mathöll.

Hlemmur is named after a small arch that used to bridge Rauðará (Red River) in old Reykjavík. The river is no longer there, but follow Rauðarárstígur (Red River Road) past favoured local record store Lucky Records, and on your right, you’ll find Norðurmýri, one of the most charming neighbourhoods of the downtown area. 

Photo from Wikimedia, Creative Commons, by Jóhann Heiðar Árnason

Norðurmýri is something of an urban oasis, where stone houses and fenced gardens come together to create a central suburbia. The name of the precinct, marked by Miklabraut in the South and Snorrabraut in the West, translates to ‘Swamp of the North’, referring to the old swampland that used to cover the area. Most of the houses in were built in the 1930s, and the streets take their names from characters in Icelandic Sagas Njála and Laxdæla, as well as the Book of Settlement (Landnámabók).

All the houses' gardens face south, providing optimal sunshine and ample opportunity for residents to grow different plants for harvesting or beautification. 

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• Learn more about the Sagas here: Icelandic Literature for Beginners 

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Photo from Wikimedia, Creative Commons, by Gary J. Wood

Throughout the years, the neighbourhood has been known to harbour an abundance of artists, scholars and musicians. Since 2012, the annual open block party Norðurmýrahátíð has taken place in different spots around the precinct. During the festivities, the streets are decorated and live music, markets and workshops pop up during a selected summer’s day. 

Skolavordustigur & Thingholt  

A map showcasing what most often constitutes as Þingholt; although there are disagreements concerning the exact borders

The most iconic landmark of the entire city of Reykjavík is without a doubt Hallgrímskirkja Church, a monumental triumph of Icelandic architecture that rests on top of Skólavörðuhæð Hill. The name of the hill, however, predates the church by about two hundred years. 

Where the statue of explorer Leifur Eiríksson now stands, there used to be a stone tower known as Skólavarðan (the School Cairn), a stone monument built by students in the 1700s as part of a homecoming ritual.

Photo from Wikimedia, Creative Commons, by Gerd Eichmann

The tower’s latest rendition, constructed in 1868 and commissioned by Governor Árni Thorsteinsson, could historically be called Reykjavík’s very first man-made landmark. 

The pathway leading up to the tower became known as Skólavörðustígur (School Cairn Road), but the tower was demolished when Alþingi, Iceland's legislative body, saw its 1000-year anniversary. Then, the statue of explorer Leifur Eiríksson—a gift from the United States government—permanently took its place. 

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• Visit Þingvellir, site of the original Alþingi, on these Golden Circle Tours 

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Today, Skólavörðustígur is one of the most traversed streets in the city, boasting numerous restaurants, boutiques, design shops and cafés. Some of the street's most ancient buildings still stand there, such as Hegningarhúsið, Iceland's oldest prison. 

To the left of Skólavörðuhæð stretches the residential neighbourhood Þingholtin, dotted with old and colourful houses of timber and corrugated iron. Take a stroll down the district's main road Miðstræti and behold an entire block of perfectly preserved 19th Century houses which have been home to many of Iceland's most distinguished intellectuals and poets.

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• See a selection of Culture Tours on the largest marketplace of things to do in Reykjavík 

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Photo from Wikimedia, Creative Commons, by HerbertG

The area's main attraction is arguably Menntaskólinn í Reykjavík, the city’s oldest junior college. The building was erected in 1846 but the school itself traces its origins back as early as 1056.

Photo from Wikimedia, Creative Commons, by Carpfish

Last but not least, you'd be well advised to visit the Einar Jónsson Sculpture Garden, an inner-city gem overlooked by many of Reykjavík's visitors. Einar Jónsson is Iceland’s most celebrated sculptor, having produced countless masterpieces such as the Ingólfur Arnarson statue on Arnarhóll Hill.

Grjotathorpid & Kvosin

A map showcasing the borders of Grjótaþorp; Kvosin only constitutes as the buildings on Aðalstræti by Ingólfstorg

Grjótaþorpið is home to some of the oldest houses in the capital. Because it was constructed before the existence of a city planning committee, the neighbourhood is composed of crisscrossing streets and randomly placed houses—this, however, only adds to its charm and appeal. 

As it happened with the Skuggi Farm and the Skuggahverfi District―having begun to develop around a small farmstead known as Grjótið (The Rock) in the middle of the 18th century, the area eventually became known as Grjótaþorpið (Rock Village).

A captivating landmark in the district is Unuhús, located at Garðastræti 15. The house was named after Una Gísladóttir, a revered friend to the poor who ran a bargain-priced guesthouse at the location. 

At the beginning of the 20th century, Una's house had become a cultural centre, with regulars including writers Þórbergur Þórðarson and Halldór Laxness who would become Iceland's first and only Nobel laureate in literature.  

Photo from Wikimedia, Creative Commons, by Friedrich Magnusson

Grjótaþorpið begins by Aðalstræti (Main Street), that also marks the outset of Kvosin. At Aðalstræti 10, the oldest house in central Reykjavík still stands, constructed in 1762 as part of Sheriff Skúli Magnússon's industrialisation efforts.

In 2001 a 10th Century Viking longhouse was unearthed at Aðalstræti 16 and is now open to the public as the centrepiece of The Settlement Exhibition. 

Since the development of Kvosin constitutes both the beginning of Iceland's settlement and Reykjavík's industrialisation, the district is known as the birthplace of Reykjavík. 

Kvosin is bordered by Aðalstræti, Lækjargata and Lake Tjörnin. Today, Tjörnin serves as one of the most scenic spots in the central capital. All around this idyllic bird colony there's plenty of beauty to behold—from the old Scandinavian lake-homes that dot the eastern shore on Tjarnargata (Pond Street) to the lush public gardens of Hljómskálagarður and Hallargarður.

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• See also: Tjörnin | The Pond in Reykjavík

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Additionally, you'll find several museums encircling the lake, including the National Museum and the Reykjavík Art Museum. Furthermore, Reykjavík's City Hall was constructed on a landfill in Tjörnin in 1992; and apart from being the arena in which the capital's politicians stage their dramas, City Hall is also home to Reykjavík's official Tourist Information Centre. 

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• Get unlimited access to the city's many museums with the Reykjavík City Card 

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The monumental City Hall building, designed by local architecture firm Studio Granda, is constructed in such a manner that it appears to rise directly from the surface of the water. 

Harpa & The Old Harbour 

For a nation historically dependent on fishing, the charming and colourful Old Harbour, known to the locals as Reykjavíkurhöfn, was originally a natural inlet that over time became enveloped in a maze of wooden docks.

These, however, were only suited for smaller vessels and larger ships had to make anchor far away from the shoreline.

The construction of a proper harbour was the matter of social debate for decades, but the argument was driven home after a great storm destroyed a large group of ships anchored offshore in 1910. Following the disaster, the government agreed to fund the building of a harbour and in 1913, large ships could finally dock in Reykjavík. 

The building of the new and improved docks was the greatest industrial project the country had seen. The Reykjavík Harbour would function as the capital's official shipping port until the 1960s when the larger Sundahöfn harbour was constructed. 

Photo from Wikimedia, Creative Commons, by Reykholt

For decades after this shift, the Old Harbour was primarily used by independent fishers and boat owners, as well as serving as the operational centre for the Coast Guard of Iceland. 

Today, the harbour is teeming with life. At Port Suðurbugt, vibrantly blue industrial sheds from the 1930s now house seafood restaurants and cafés, while whale watching tours set out daily from the docks.    

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• See also: Whale Watching in Iceland

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You'd be well advised to visit the Reykjavík Maritime Museum at Grandagarður, which is a fantastic way to become versed in the importance of the docks and how the Icelandic nation was shaped by the ocean. 

Harpa in winter - Flickr photo by Giuseppe Milo 

But there's one development above all others that constitutes as the harbour's greatest makeover since its original construction. The Harpa Concert Hall and Conference Centre is the latest jewel in Reykjavík's crown, designed by local artist Ólafur Elíasson and Danish firm Henning Larsen Architects. 

In addition to the grand concert hall, original plans for the area included a World Trade Centre, a hotel, apartment complexes, shops and a large car park. The 2008 financial crisis, however, put a stop to these ambitious and costly procedures.  

Be that as it may, the idea of building a proper concert hall for the nation had been circling since the 1880s, so the Icelandic government (broke or not) decided to finance the completion of the project. 

The superstructure consequently got built, serving as a final visual reminder of the boom before the crash. That is not to say the Icelandic people detest or disapprove of the building. On the contrary—the voices that opposed to spending money on the project became noticeably quiet when the phenomenal result saw the light of day. 

Photo from WIkimedia, Creative Commons, by Ivan Sabljak

The building boasts a facade of over 700 glass panels designed by the genius geometrist Einar Þorsteinn Ásgeirsson. Each panel has its unique shape, as well as being installed with LED lights that offer spectacular light shows on dark winter nights.  

Today, Harpan hosts the Icelandic Symphony Orchestra and offices of the Icelandic Opera, as well as an array of exhibitions, concerts and cultural events.

Once a year in February, you can experience the elegant concert hall to turn into the country's biggest nightclub, during the Sónar Music Festival which has been held exclusively at the location since 2013.   

Gamli Vesturbaer & Holavallagardur

Gamli Vesturbær; note that Vesturbær as a district is much larger and the map shows the 'old' part

Vesturbær is a large district in Reykjavík that stretches out from the centre to the outskirts of the Seltjarnarnes township. The name of the region translates to West Town, while the area north of Hringbraut Road that belongs to postal code 101 is known as Gamli Vesturbærinn (Old West Town). 

Much like Grjótaþorpið, the district historically belonged to the lower working classes, but today, such class distinctions are mostly gone. Vesturbær counts as a suburban part of 101 Reykjavík and an excellent place to call home.

Photo from Wikimedia, Creative Commons, by Kasuarer

A pleasant spot to visit in the area is Landakot, a lush green hill rich with Icelandic Catholic history. It all started in 1864 when Catholic priests from France had a small chapel built next to their farm. A few years later, the chapel was replaced by a wooden church. 

Then after World War I, the Catholic Church in Iceland felt the need for a greater house of worship. Architect Guðjón Samúelsson was yet again deemed the right person for the job, resulting in the glorious new-gothic construction of Landakotskirkja in 1929.  

Photo from Wikimedia, Creative Commons, by Jon Gretarsson

Another monument of note in the area is Landakotsspítali Hospital, erected in 1902. At the time, the city was in dire need of a new health institution, but all out of funds, so the project got backed by the Catholics with financial support from Europe. 

The state eventually took over administrating the hospital with the establishment of Landsspítalinn (The National University Hospital of Iceland) in 1930. 

Photo from Wikimedia, Creative Commons, by Jon Gretarsson

Nesting between Landakot and lake Tjörnin you'll find a particularly favoured spot in the central capital. Hólavallagarður is a 19th Century cemetery, rightfully voted as one of Europe's loveliest by the National Geographic in 2014. 

The park constitutes as one of the city’s most enchanting scenes, where tall and barren trees of birch, willow and spruce surround narrow pathways and ashen headstones.

Photo from Wikimedia, Creative Commons, by Christian Bickel 

The permanent residents of this urban thicket include Jón Sigurðsson, leader of Iceland’s independence movement; Hannes Hafsteinn, poet and political leader; and Bríet Bjarnhéðinsdóttir, the forerunner of women’s suffrage in Iceland.

Take a romantic stroll through this bewitching old graveyard and notice how the bustle of the capital stifles down, as you travel back in time amongst some of the most fondly remembered residents of Reykjavík City.  

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Given 101 Reykjavík's settlement history, trading post origins, monumental dwellings and cultural allure, it’s no wonder that the downtown area ranks as the most highly favoured domicile of the Icelandic nation. 

Despite minor recurrences of suburban flight throughout the years, businesses and individuals tend to choose the walkable city centre as their ideal location. The area offers a less car-dependent, more urban lifestyle, that attracts more than just the young. 

The downtown districts might be under pressure for the time being, given the incredible amount of visitors, but that also results in the capital becoming more vibrant than ever before.

When visiting the city centre, you'd be well advised to acquaint yourself with the local culture. Favour local businesses over international chains. Get to know the rats. Engage in the environment at hand; and not only will you be supporting the local way of life—you’ll obtain a more authentic and gratifying experience throughout your stay. 

101 Reykjavík is a unique and enchanting urban paradise, where wonders await around every corner. Let’s make sure it stays that way by taking care of it together. 

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Did you enjoy our guide to the city centre of Reykjavík? What are your favourite spots and districts in postal code 101? Tell us what you think in the comments box below!