Best Places to Live in Iceland

Known as the Land of Fire and Ice, Iceland is filled with stunning glaciers, cascading waterfalls, steamy geothermal hot springs, and fierce volcanoes.

Lauded as one of the safest countries in the world, settling in Iceland is a dream for anyone looking for some peace in the wilderness. You’ll also be glad to know it isn’t as cold as you’d think, though you might want to consult an Iceland packing list just to be safe.

The dramatic landscape was also the location of some of the filming for Game of Thrones. We’ve compiled this useful guide to show you the best places to live in Iceland, a mythical country filled with fairies, trolls, white walkers, and dragons.

Best Places to Live in Iceland for:

  1. Expats: Keflavik
  2. English Speakers: Reykjavik
  3. Digital Nomads: Akureyri
  4. Solo Travelers: Egilsstaðir
  5. Families: Husavik
  6. Couples: Laugarvatn
  7. Groups: Vik

Top 10 Places to Live in Iceland

1. Reykjavik – Best for English Speakers

Cost of Living: $$$

The capital city is a cosmopolitan haven for pretty much everybody. Featuring the cream of Iceland’s culture, Reykjavik is bursting with vitality.

Armed with a horde of museums, art galleries, and cultural appeal, you can learn everything there is to know about Iceland from its sparkling capital.

Tip: Research your plans before you hop on a plane. Forewarned is forearmed.

Who Would Like to Live There: Expats, English speakers, students.


  • High standard of living
  • Friendly, English-speaking Icelanders
  • Wide range of activities and sites


  • Unreliable public transportation
  • 60% of the country’s population lives here
  • Expensive rental prices

2. Hafnarfjörður – Best for Arts and Culture

Cost of Living: $$$

Settled in a lava field and dwarfed by the majestic mountains surrounding it, Hafnarfjörður is an arts and culture hotspot. The annual Viking Festival celebrates Iceland’s Norse heritage, where you can bask in folk music and try out the local cuisine.

The town’s stunning surroundings offer excellent opportunities to appreciate the country’s natural brilliance.

Tip: Locals are friendly but also culture-conscious. Respect their customs, and you’ll fit right in.

Who Would Like to Live There: Artists, families, history buffs, child carers.


  • Good work-life balance
  • Near Reykjavik and Keflavik International Airport
  • Port City, which would mean better access to goods


  • 24 hours of daylight in summer and long periods of darkness in winter
  • Somewhat insular community
  • Specialized products and services require a trip to the capital

3. Keflavik – Best for Expats

Cost of Living: $$

Keflavik gives you a small-town feel with big-city features. Home to one of the country’s international airports, this city is often bustling with the comings and goings of its people. It’s also primed for expat living and welcomes foreigners with open arms.

Keflavik is surrounded by some of the best attractions in Iceland, among them the legendary Blue Lagoon and the Reykjanes Peninsula, designated a UNESCO Global Geopark.

Tip: It’s easier to get a work visa if you have a job lined up before you travel.

Who Would Like to Live There: Expats, families with kids, frequent fliers


  • Iceland’s main airport is in Keflavik
  • Emphasis on family, nature, and sustainability
  • Reliable public transport


  • Competitive job market
  • Lengthy residency process
  • Groceries and takeout are particularly expensive

4. Siglufjörður – Best for Fishing and Nature

Cost of Living: $$

In between the mountains and the sea lies Siglufjordur, a tiny town in the far North of Iceland. With a population of a little over 1000 people, moving here will make a new city feel like home.

The marvelous landscape offers opportunities for extreme sports in both the mountains and the sea. The town’s fishing heritage is celebrated along with its love of traditional folk music.

Tip: If you’re coming to Iceland without a job in hand, make sure you have enough savings to tide you over until you find work.

Who Would Like to Live There: Retirees, nature lovers, skiers, hikers


  • Peaceful easygoing lifestyle
  • Excellent skiing destination
  • Sense of close-knit community


  • Remote location
  • Difficulty getting around due to the terrain
  • Prone to strong winds and storms

5. Akureyri – Best for Digital Nomads

Cost of Living: $$

Akureyri is an adorable town in Northern Iceland. The country’s fifth-largest city is a lush sanctuary inviting you into some of Iceland’s most beautiful attractions. Flush with serene parks, exciting festivals, and magical views, you’ll always have something to do in Akureyri.

Tip: Embrace the work-life balance. Icelanders work hard, but they also play just as hard. 

Who Would Like to Live There: Digital nomads, contract workers, nature lovers


  • High-level of connectivity
  • Vibrant social calendar
  • Stunning natural landscape


  • Limited indoor entertainment
  • Language barrier
  • Severe winter

6. Laugarvatn – Best for Couples

Cost of Living: $$

Laugarvatn is an authentic Icelandic village located on the famed Golden Circle route. Often overlooked due to its size, this picturesque little place is definitely a haven, especially for those looking for tranquility and zen.

Sitting on a mirror-like lake, Laugarvatn is powered by the steamy geothermal hot springs here. These springs provide heat for the town and pull visitors to the iconic Fontana Spa. Don’t forget to look out for the Northern Lights while you try some locally made Skyr, Iceland’s favorite superfood.

Tip: Swap your tank tops and shorts for warmer gear. With a subarctic climate, a suntan isn’t going to happen in Iceland.

Who Would Like to Live There: Couples, solo travelers, digital nomads


  • Fantastic geothermal hot springs
  • Picturesque landscape on the Golden Circle
  • Lovely local cuisine


  • A population of around 200 means there is minimal access to goods and services
  • Isolated
  • Virtually nonexistent transportation if you don’t have a car

7. Hvolsvollur – Best for Outdoor Enthusiasts

Cost of Living: $$

Hvolsvollur is the only town in Iceland that isn’t near a river or the sea. The town’s primary focus is agriculture and tourism. Near some of the country’s most awe-inspiring attractions, this little town is an excellent place to live if you like the outdoors.

Katla UNESCO Global Geopark is nearby, as well as multiple waterfalls and hiking areas. The greenery in the town is a welcome sight, and if you appreciate country life, this town is for you.

Tip: Be open to new experiences. Iceland is a unique country. Its lands, cultures, and cuisine are not run-of-the-mill. Try new things; you’ll be pleasantly surprised.

Who Would Like to Live There: Outdoor enthusiasts, nature lovers, families


  • A wide array of outdoor activities and day trips
  • Fresh meat and produce
  • Convenient location


  • Very limited field of work
  • Unpredictable weather
  • Limited services

8. Vik – Best For Adventure Lovers

Cost of Living: $$$

Vik is a remote town on the southern tip of Iceland. Known for its unusual and dramatic landscape, Vik is home to Reynisfjara black sand beach, well known for the basalt columns reaching for the sky and its wild waves.

The lack of light pollution means that Vik is one of the best places in the country to see the magical Northern Lights. If you live there, you’ll share your town with cute little puffins and a very much active volcano. We think it’s a fair balance, though.

Tip: Try to learn the language. While English is common, learning some Icelandic shows respect for the local people and their culture. It will also open many doors for you and help you make friends.

Who Would Like to Live There: Adventure lovers, expats, digital nomads


  • Relaxed, community-centered lifestyle
  • One of the best places to see the Northern Lights
  • Unique and unusual landscape


  • At risk for storms and natural disasters
  • High cost of living
  • Minimal access to amenities and services

9. Húsavík – Best for Families

Cost of Living: $$$

Known as the Whale Watching Capital of Europe, Husavik sees marine life unlike anywhere else. The town’s history with whales is shown in its Whale Museum, as well as the annual Whale Festival.

Aside from the sea life, the land offers an array of exciting activities. The sky gifts you with the sought-after Aurora Borealis as well as unique opportunities for bird watching. The scenic wonder of this little town packs an unexpected punch, and any direction you happen to glance in offers you a glorious sight.

Tip: The best way to get in with the locals is to involve yourself in the community. Participate in events, volunteer with NGOs and community initiatives, and you’ll integrate like a walk in the slightly icy park.

Who Would Like to Live There: Families, nature lovers, whale enthusiasts


  • Quiet, small town
  • Beautiful natural scenery
  • Friendly and welcoming locals


  • Located in the Arctic Circle, so experiences Polar Night
  • Job opportunities, restricted to specific fields
  • Restricted public transport

10. Egilsstaðir – Best for Solo Travelers

Cost of Living: $$$

A charming oasis in Eastern Iceland, this city is a collage of heady views. The Lagarfljót River is popular with fishermen, and the Hallormsstaðaskógur National Forest draws avid hikers and birdwatchers. The Vatnajökull National Park is nearby and houses Europe’s second-most sizeable glacier.

Tip: Familiarize yourself with the neighborhoods. Each has a unique point of interest, and getting to know the town will help you settle in better.

Who Would Like to Live There: Solo travelers, retirees, outdoors enthusiasts


  • Good health and education infrastructure
  • Diverse landscape
  • Emphasis on Icelandic culture


  • Isolated location
  • Lack of entertainment and nightlife
  • Limited job scope

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