The objective of the paper is to investigate if and how site effects caused by a complex combination of rock and sediment layers affect the response characteristics of reinforced concrete buildings. The study focuses around two buildings in the town of Selfoss in South Iceland. The buildings were monitored during and/or after major earthquake events. In an effort to recreate the observed variation in the structural behaviour, a finite element model has been constructed of the structures including the foundation effects through simple spring elements. The models have been applied to match the numerical response to the recorded response. Analyses of recorded seismic response indicates considerable influence from the foundation on the structural behaviour and the dynamic response of the reinforced concrete structures. It is also deduced, that when subjected to an earthquake, the dynamic properties of the soil/rock foundation will change in terms of shear strength and damping as a function of the intensity of the excitation. This is probably especially true for the underlying sedimentary layer as the amount of strains in the sedimentary layer to a large degree controls the frequency response. The response spectra obtained indicate that the large damping and the excitation frequency shift created by the soil layers in the foundation generally reduces the higher frequency amplitudes of the accelerations at basement level within the buildings but increases the lower frequency acceleration amplitudes. For tall and medium-rise buildings this may increase the overall acceleration levels of the building compared to a rock based foundation, whereas for low-rise buildings this may reduce the story drift and thereby the overall structural strains.