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Gerry Brownlee - Source: Close Up
Christchurch demolition plan announced. - Source: ONE News
A map shows the zoning for Christchurch suburbs - Source: ONE News -
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Earthquake Recovery Minister Gerry Brownlee says he does not believe Red Zone homeowners will face skyrocketing house prices.
The owners of 5100 Christchurch homes were today offered the
option of selling their homes to the Government at their 2007
rateable value.
On TV ONE's Close Up tonight,
Avonside homeowners told Brownlee they feared taking that
option up would potentially see them priced out of a highly
competitive housing market.
Avonside resident Mike said: "We're going into a market with
$200,000 and the market, flooded with money, is going to increase
the section prices throughout Christchurch."
Brownlee said that was a legitimate concern but that the government
has the power to "push the button" and approve construction of up
to 16,000 sections in Christchurch within a 2-3 year period.
"I think in the end, what we have is the capacity to make
land available and I think that's a very powerful tool," said
Brownlee.
"I don't accept the position that somebody who's got $200,000 cash, has an opportunity to borrow at 3.75% for an extended period of time, is powerless in the market," Brownlee said.
He also said it would be easier for people to finance their homes in the current market.
"Back in 2007, the mortgage rate was 10%+. It's now getting towards a much lower level and you've seen banks come in today with various options at very low interest rates as well."
ANZ and Kiwibank announced today special home loan packages for Red Zone homeowners at a 2% discount on their floating rates.
Some Red Zone residents Close Up spoke to said the Government should be buying new land for them, but Brownlee said that was not a practical option.
"The prospect of the government buying land, 5000 sections, is not something that you can magic up out of air in the sort of time people want," he said.
"You have to rely to some extent on what is already consented, what is already available."
Residents in the Red Zone will have nine months to accept the offer. Prime Minister John Key said affected residents would be given an offer of purchase within the next eight weeks.
Red Zone areas include streets in Bexley, Avonside, Avondale, part of Brooklands, Burwood/Horseshoe Lake, part of New Brighton and Dallington.
Four zones
The owners of around 10,000 homes in the Orange Zone will need
to wait for further investigations to conclude before their fate is
known.
Canterbury Earthquake Recovery Authority chief executive Roger
Sutton said they could be waiting up to three months to get a
resolution.
"We have to work as quickly as we can to give them some certainty,"
he said.
Residents in the White Zone, which covers the Port Hills and the
CBD, will also have to wait with mapping is still underway.
Residents in the Green Zone have been given the go-ahead to
rebuild.
The Government has not yet finalised arrangements for businesses in
the Red Zone.
The cost to the Crown of buying the homes will be between $485
million and $635 million.
The entire cost of the earthquakes could be as high as $20 billion,
8% of New Zealand's GDP.
To see the division of Christchurch into four zones
click here.
Quake victims react
ONE News Christchurch based reporter Lorelei Mason said
the general feeling in the Red Zone suburb of Shirley was that
there was a sense of clarity about their homes.
Residents gathered in their local pub to watch the
announcement.
One woman said the announcement allowed her to "move on and start
making plans which we haven't been able to do for the past nine
months", while another quake victim said the details gave
"certainty to know where we stand so we can make some decisions
about where we go next moving on from here".
A website for residents to check which zone their property has
been included in has been set up. It is
www.landcheck.org.nz
Trade Me business manager Mike O'Donnell said there were two
million hits to the site in the first 90 minutes of it going live.
There were 522,000 individual property searches.
The site went down briefly in the first 25 minutes of it launching because of overload.
Today's announcement comes after months of uncertainty as homeowners struggled with a series of devastating quakes which resulted in serious damage to their homes as well as massive problems caused by liquefaction.
In many places residents have had the heartbreaking job of clearing silt from their homes and sections four or five times since the first earthquake in September.
Key said: "The Government remains fully committed to rebuilding Christchurch."
Watch John Key's announcement in full here
Key said the "right solution" had been sought by the Government and that today's announcement was the "next step" in the support.
Advice from geotechnical engineers has seen all greater Christchurch land divided into four residential zones - red, orange, green and white.
There are around 5000 properties in the residential Red Zones. Land in these areas is unlikely to be able to be rebuilt on for a "considerable period of time".
Options for residents
For people who owned property with insurance in the residential
Red Zones on September 3, last year there will be two
options:
- The Crown makes an offer of purchase for the entire property at
current rating value (less any built property insurance payments
already made), and assumes all the insurance claims other than
content
Or
- The Crown makes an offer of purchase for the land only, and
homeowners can continue to deal with their own insurer about their
homes.
Key said: "Since September last year, the Government has been working to provide certainty for residents, while recognising many people have their life savings tied up in their homes.
"Today we have released the most up-to-date information we have about the state of the land in greater Christchurch."
Earthquake Recovery Minister Gerry Brownlee said the boundaries were "robust" and that with regard to the red zones it was "not feasible to rebuild on this land at the present time".
Red Zone criteria
The criteria for defining areas as residential red zone
are:
- There is significant and extensive area wide land damage
- There is a high risk of further damage to land and buildings
from low-levels of shaking
- The success of engineering solutions would be uncertain and
uneconomic
- Any repair would be disruptive and protracted
Orange, Green and White Zones
There are around 10,000 properties in the Orange Zone which require further assessment. Areas include parts of Parklands, Fendalton and Woolston.
Land in the Green Zone has no significant issues which will prevent rebuilding, and insurers can continue claim settlements for these area as normal. Land in the White Zone is un-categorised which is still being assessed
To watch Gerry Brownlee explain the zones click here. For further information about the zones click here
The Canterbury Earthquake Recovery Authority intends to progressively reclassify the Orange and White Zones to either Red or Green in the coming weeks.
EQC claims
The Earthquake Commission has received more than 360,000 claims for all the earthquakes since the September quake, one of the highest numbers ever handled by a single insurer in the world.
The previous biggest event for EQC was the Gisborne earthquake in 2007 with 6224 claims.
Christchurch Mayor Bob Parker said there was "still more work" to be done.
He said it was "absolutely apparent" that remediation of land in the Red Zones could take many years.
"We have 5000 households that as a result of today have real clarity and I think that's a huge step forward," he told ONE News.
To watch Bob Parker's full reaction click here.
Have your say on today's developments on the ONE News Facebook page or on the messageboard below.
Are you affected? Have you been contacted by authorities? Email news@tvnz.co.nz
Add a Comment:
Post new commentLyn A said on 2011-06-25 @ 13:22 NZDT: Report abusive post
I cannot understand the PM's grandstanding about this offer...a big show trying to make him & his cronies look wonderful! He managed to fins in a budget that had no money $5.5 billion and now $500 million for these 5000 sections. In September last year, the EQC had $5.6 million in hand. The EQC covers land for up to $100,000. $100,000 x 5000 = $500 million. This obviously is not a Government package, but a payment from EQC
kiwitom47 said on 2011-06-24 @ 15:40 NZDT: Report abusive post
I think ii is a start, and ofcourse, cannot all fall into place all at once. We can only take each day as it comes, and enjoy each, in the best way we can. To those in the Red Zone especially, you are not alone. The rest of NZ is watching down on you. Take care be safe Tom Bromley
gherkin said on 2011-06-24 @ 12:15 NZDT: Report abusive post
Moving to Dunedin last year before the quakes, we, plus our family, and the friends we've made here have been concerned for the status of our house in Parklands. My instincts were correct, but nothing was obvious to us, blindingly or otherwise, because we're a distance away and rely on the assessment of neighbours, tenants, property managers, all of it appreciated but none of it made decisions easier. We'll wait it out and are grateful for the orange sticker, better than the previous limbo.
BadToTheBone said on 2011-06-24 @ 12:11 NZDT: Report abusive post
I
vic50 said on 2011-06-24 @ 11:29 NZDT: Report abusive post
we are from christchurch and are in the green zone but have damage to our property we are not expecting to being assessed for a good year. I do feel sorry for those people whose houses have been red zone, but they should feel relieved in a way they are getting payed out for their damage and expecting more money than what their properties are worth is unfair on all the other chch people who have to sit and wait for a pay outs.