For centuries, the towns and villages along Iceland’s south shore faced significant challenges in thriving due to the relentless forces of nature. The shifting sands made it nearly impossible to construct a functional harbor, which hindered access to the nearby fertile fishing grounds. As a result, transporting the catch inland became a logistical nightmare.
However, Icelanders have always been resourceful, and by the 16th century, they found a way to establish trade in this challenging environment. Eyrarbakki became part of the Danish-Icelandic Trade Monopoly, which allowed it to import goods from Denmark and develop into one of Iceland’s most important trading centers. For many years, Eyrarbakki thrived as a bustling hub of commerce, surpassing many other settlements along the south coast.
Eyrarbakki: A Once-Thriving Trading Powerhouse
Eyrarbakki experienced a golden age when it grew into one of the largest and busiest towns in Iceland. Its strategic location along the coast made it a central hub for trade, connecting Icelandic fishermen and farmers with Danish merchants. Goods such as timber, grain, and textiles were imported into Iceland, while dried fish, wool, and skins were exported to Europe.
At its peak, Eyrarbakki was a vibrant community and a place of opportunity, attracting individuals eager to be part of a thriving economy. However, the town's success relied heavily on its trade monopoly. As Iceland's economy modernized in the 19th and early 20th centuries, Eyrarbakki's significance began to wane. The advent of free trade, advancements in transportation, and changes in economic priorities all contributed to the town's decline.
The Bridge That Changed Everything for Eyrarbakki
One of the key turning points in Eyrarbakki's history occurred in the late 19th century with the construction of a bridge over the Ölfusá River. Before the bridge was built, Eyrarbakki served as the primary access point for goods coming into southern Iceland. However, once the bridge was completed, the town of Selfoss—located further inland—emerged as the new commercial hub.
This shift in trade routes had a dramatic impact on Eyrarbakki. Businesses that once thrived on trade began to close, and many residents left in search of better opportunities elsewhere. The town, which had previously been a lively center of commerce, now struggled to redefine its purpose.
A village that came to a standstill in time
After losing its status as a major trading post, Eyrarbakki attempted to reinvent itself as a fishing town. Its coastal location seemed ideal for a thriving fishing industry, but nature had other plans. Unlike other towns, such as Grindavík or Vestmannaeyjar, Eyrarbakki lacked a natural harbor, which made it difficult to create a functional docking area for fishing boats.
As the Icelandic fishing industry expanded, towns with better harbors flourished while Eyrarbakki struggled to compete. The town observed as northern and eastern Icelandic communities thrived in the booming herring industry, leaving Eyrarbakki behind.
Despite these challenges, the spirit of Eyrarbakki’s residents remained strong. They adapted by turning to other industries, such as agriculture and small-scale production.
Preserving History: Eyrarbakki Today
Though Eyrarbakki never regained its former prominence, it remains one of Iceland’s most historically significant towns. Walking through Eyrarbakki today, visitors can see beautifully preserved houses dating back to the 18th and 19th centuries. The town has embraced its rich past, becoming a cultural heritage site where history comes to life.
Some key attractions include:
Húsið (The House at Eyrarbakki): One of the oldest surviving wooden houses in Iceland, now serving as a museum showcasing life in Eyrarbakki during its trading heyday.
Eyrarbakki Church: A charming church with a fascinating history and unique interior.
The Árnessýsla Folk Museum: A treasure trove of artifacts detailing the history of the south coast.
The Black Beach: A stunning stretch of volcanic sand where visitors can appreciate Iceland’s raw natural beauty.
Eyrarbakki is like a museum town for Iceland
Eyrarbakki has become an appealing location for those who work in Selfoss or Reykjavík but prefer the charm of a small coastal town, thanks to improved infrastructure and transportation.
Eyrarbakki is part of the larger municipality of Árborg, which also includes the town of Selfoss and the neighbouring village of Stokkseyri. Today, Eyrarbakki has a population of around 600 residents in January 2025. This integration has provided the town with better access to resources while allowing it to maintain its unique character.
One of the most charming aspects of Eyrarbakki is its commitment to preserving its history while embracing modern life. The town is home to one of Iceland’s oldest primary schools, and despite its small size, it remains an active and welcoming community.
Eyrarbakki is a small community in a larger municipal
Why Visit Eyrarbakki?
Eyrarbakki may no longer be Iceland’s largest town, but it is a must-visit destination for history lovers and those seeking a glimpse into Iceland’s past. It offers a slower, more intimate experience compared to the hustle and bustle of Reykjavík. Whether you're exploring its old buildings, enjoying fresh seafood, or taking in the coastal views, Eyrarbakki is a town that tells a fascinating story of resilience, adaptation, and heritage.
If you're planning a road trip along Iceland’s south coast, consider stopping by Eyrarbakki. It’s a perfect spot to stretch your legs, soak in some history, and experience a piece of Iceland’s rich cultural tapestry. If you are planning a Ring Road tour beginning with the Golden Circle, Eyrarbakki is a great place to accommodate to begin you Ring Road trip.
Practical Travel Tips
Getting There: Eyrarbakki is just a 45-minute drive from Reykjavík, making it an easy day trip.
Best Time to Visit: Summer offers longer daylight hours and better weather for exploring.
Where to Eat: The town has some great options for fresh seafood, and nearby Stokkseyri offers famous lobster soup.
Nearby Attractions: Combine your visit with a trip to the charming village of Stokkseyri or the larger town of Selfoss for more amenities.
Hotels and accommodation in and around Eyrarbakki village
Bakki Hostel & Apartments: Located in Eyrarbakki, this accommodation offers both hostel and apartment options with ocean views and modern amenities.
SeaSide Cottages: These cottages offer a unique stay with beautiful sea views, perfect for those seeking a tranquil retreat.
Guesthouse Kvöldstjarnan: Located in the nearby village of Stokkseyri, this guesthouse provides comfortable accommodations with easy access to local attractions.
Eyrarbakki may not be Iceland’s economic powerhouse anymore, but its legacy as a once-thriving trade center and its beautifully preserved history make it a gem worth visiting. Whether you’re a history buff, a photographer, or just someone who enjoys exploring Iceland’s hidden treasures, Eyrarbakki is a place that truly embodies the spirit of the country’s coastal heritage.
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