In its own unpredictable, temperamental way, Iceland is still taking shape. Glaciers advance and retreat, volcanoes erupt, bridges wash away and streams of snowmelt carve new paths. Visit next year and it won't look quite the same.

The Nordic nation is uncannily reminiscent of New Zealand. The brooding Tolkienesque grandeur and sparsely populated landscapes where sheep outnumber people all seem vaguely familiar. You won't meet any hobbits but if the locals are to be believed, you might encounter a troll or two.

I've hired a car for the week and plan to follow Route 1, a well-maintained artery that encircles the island. For those without mountaineering equipment, an off-road vehicle or a love of cold-weather camping, the 1,332km loop offers an accessible introduction to many of Iceland's must-sees.

Visitors tend to underestimate how long they'll need to do the ring road justice. Ten days is par; anything less means skipping a whale-watching trip or bypassing the odd glacier. Each evening I find myself phoning ahead to tell my hosts that I'll be arriving late.

"Too much to see; too little time to see it," I explain, combining an apology with a compliment. They've heard it all before, of course, and are very understanding. Bjarni, who greets me in the fishing village of Dalvik, admits he sometimes forgets how beautiful his own country is.

"When you've lived here your whole life, you take it for granted," the hotelier says. "But my guests are always reminding me that I live in an amazing place."

Dalvik is on the western shore of Eyjafjordur, the longest fjord in Iceland. Greenland lurks somewhere over the horizon, as does the Arctic Circle.

It's June, so the sun doesn't actually set. Instead it hangs low in the sky for an age before recommencing its upward trajectory. I head down to the water's edge with my camera at midnight and I'm still snapping an identical crimson-flecked sky two hours later.

Photos become obsolete very quickly in these parts; no sooner have you captured a gorgeous glistening seascape than you stumble on an even more jaw-dropping view just up the road. Bring plenty of memory cards.

Gradually though, Iceland's relentlessly spectacular scenery numbs my ability to appreciate it. Glaciers seem less impressive once you've seen half a dozen; volcanoes, fjords and iceberg-filled lagoons become ho-hum after a few days. Perhaps Bjarni has a point.

I find myself driving straight past waterfalls that would appear on postcards in any other country - pausing only to gawp at the most celebrated. Thundering cataracts throw up rainbows of spray at Dettifoss; it's possible to walk behind the cascades at Seljalandsfoss and hike above them at Skogafoss. Some have wonderful-sounding names like Gluggafoss; others have glistening bridal veils that tumble down mountains, soaking anyone who gets too close. Many tourists learn the Icelandic word for "waterfall" before they know how to say "please", "thank you" and "does it ever get dark around here?"

The language is as dramatic and otherworldly as Iceland itself and has a vocabulary that bamboozles tongue-tied travellers. Eyjafjallajokull, the volcano which caused so much disruption when it erupted in 2010, is only the tip of the iceberg, so to speak. Residents of Kirkjubæjarklaustur must tire of filling in forms and place names that look relatively benign can still catch you out. The town of Höfn for example, is pronounced by inhaling and saying "hup" as if you have the hiccups.

The temperature drops noticeably on the approach road to the Solheimajokull glacier. A group of windcheater-clad figures equipped with ropes and crampons follow their guide gingerly across the ancient ice. Going it alone is not recommended as malevolent crevasses and sinkholes await the novice. I limit my exploration to tiptoeing around the grubby snout - which is more enjoyable than it sounds.

In sleepy Borgarnes (most towns in Iceland are sleepy), my innkeeper, Magnus, proudly shows off his steaming, bubbling (and tempting) hot tub. He hasn't taken a dip for at least two weeks but says he likes to keep it ready, just in case. Icelanders are the biggest per capita consumers of electricity in the world and Magnus appears to be leading the way.

Fortunately, the nation's needs are met by a combination of geothermal and hydroelectric power. In one of the world's most expensive countries, electricity is almost free. Having grasped the concept of unlimited renewable energy, I find it strangely liberating to wander around my hotel leaving all the lights on.

The Blue Lagoon spa is a short drive from the capital, Reykjavik. Hot, mineral-rich water is fed here from the nearby geothermal power plant and is reputed to ease the suffering caused by skin diseases. For some locals, the popular lava field spa has a magical energy of its own.

Surveys suggest that half of all Icelanders believe in the existence of Huldufolk, or hidden people. Roads have been diverted so as not to disturb elves' homes and when excavation machinery being used to remodel the lagoon kept breaking down, contractors realised they'd have to think outside the box.

An alfur serfrædingur, or elf expert, was employed as a go-between and soon discovered the cause of the problem. The elves needed reassurance that the construction work wouldn't encroach on their living space. A USB flash drive containing engineering plans was left out for the anxious creatures and - wouldn't you know it - the project was completed without further mishap.

I complete my circuit of the ring road and arrive in the world's northernmost capital just in time for National Day, which marks Iceland's independence from Denmark. The celebrations are rather low-key, much like Reykjavik itself, but after a week of eerily empty landscapes, it's almost overwhelming to be among crowds again.

Bars along Laugavegur, the main street, are packed with punters glued to television screens. The World Cup is in full swing and if Iceland hadn't been narrowly beaten by Croatia in the playoff stage, the team would be sweltering with the best of them in Brazil.

Not a bad effort for a country with a population similar in size to that of Tseung Kwan O. Excluding elves, of course.


Getting there: Cathay Pacific flies from Hong Kong to London. Easyjet flies from Luton Airport to Reykjavik.