Govt to buy 5100 quake properties
Stuff and Taonga News
| 23 Jun 2011
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A map showing the worst-hit streets in Christchurch. TV One
The Government will buy 5100 of the worst-affected insured properties in Christchurch as part of a package announced by Prime Minister John Key this afternoon.
But it has also highlighted another 9000 properties where further work is needed before their future can be known.
The cost to the Crown of buying the worst-hit homes will be between $485 million and $635 million.
These homes are mainly in Bexley, Avonside, Avondale, Burwood/Horseshoe Lake and Dallington.
Earthquake Recovery Minister Gerry Brownlee said the offer would allow people to "cash up and go fairly quickly".
The price offered would be the rating valuation that applied before the September 4, 2010 quake, less any built property insurance payments already made. The values were set in 2007, but Mr Brownlee said values across the country had fallen since 2007 so the offer was reasonable.
Those selling to the Government would also avoid real estate charges.
Residents would have nine months to either accept the offer or negotiate with insurers themselves.
Those affected would be contacted in the next six to eight weeks.
Mr Brownlee said it would take time to prepare the documentation.
Those who thought they had made improvements, such as new bathrooms or kitchens, that were not included in the valuation could present receipts for work and that would be taken into account.
The costs will be met from the $5.5 billion earthquake recovery fund.
Mr Brownlee said the process of putting the package together had been sped up since the June 13 quake which had "a significant effect on the psychology of the greater Christchurch area".
The boundaries set for areas that would be abandoned were "robust" and "very defendable".
He said many homeowners would not want to move, so he was confident property values would hold up.
Four zones
Engineers have divided the city into four residential zones: red, orange, green and white.
TradeMe has set a special website locating houses in the various zones: http://www.landcheck.org.nz
The red zone contains up to 5100 homes that are not economic to rebuild.
They are in the east of Christchurch along the Avon and related waterways and former waterways, Brooklands, and in the beach area of the Waimakariri area.
The orange zone contains 9000 that may be uneconomic to repair and infrastructure damage is unclear.
"We will progressively announce the outcome of investigations in these orange areas over the coming weeks and months," Mr Brownlee said.
The green zone contains 100,000 houses and is the "go zone" for repair and rebuilding.
The white zone has not yet been mapped.
"We will progressively announce the outcome of investigations in the orange areas over the coming weeks and months," Mr Brownlee said.
In the Waimakariri district engineering work planned would be reassessed.
The priority was to help those who had helped themselves, Mr Brownlee said.
Mr Key said the absolute test was whether land could support buildings.
The rateable value represented the best approximation of values before the first earthquake.
"It's not perfect but its the best approximation we have."
To those still waiting, Mr Key said he wanted to "get it right".
Over time some of the orange zone properties would move into either red or green.
"I appreciate we are asking people to have a little more patience."
Liquefaction 'worst in world'
The liquefaction damage was unprecedented around the world, Tonkin & Taylor engineers technical expert Nick Rogers said.
He said things looked "wonky" all around the city.
Mr Rogers said there had been a lot of ground settlement, reducing the thickness of the crust between the surface and the ground water table. It made liquefaction worse and made it harder for the ground to support buildings.
Some areas had suffered a shift, with a clockwise trend around the city in September, but in February land had sunk though in areas such as the Port Hills land had risen.
In the Horseshoe Lake area of Burwood the drop was 1 to 1.5 metres.
Mr Brownlee apologised for the "serious leaks" from the Beehive to some media yesterday.
"They are not to do with me," he told a briefing at the Christchurch Art Gallery.
Labour's earthquake spokesman, Clayton Cosgrove, said setting the compensation at the pre-September 4, 2010 level had raised some concerns.
Speaking to Stuff before the detailed briefing this morning, Mr Cosgrove said some residents were worried that the amount may understate the value of their properties and others were concerned that their mortgage may exceed the valuation, leaving them with a big loss.
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