Campbell Live report
Today the Government announced that it is offering to buy the most badly damaged Christchurch homes at 2007 Government Valuations.
Last night on Campbell Live, there was a report on the Government offer to purchase the most badly damaged properties from home owners who agreed to do so. The idea is that the Government will deal with the insurance companies and a payout will allow the stricken home owners to get their money out and move on with their lives.
What was most surprising about the report was that the room full of home owners being interviewed seemed to think they were being ripped off! They all said that they would turn down the Government offer and hold out for 2010 market value. Campbell Live, like most current affairs shows, isn’t known for it’s accurate reporting or insightful investigation. It’s infotainment for the masses more than a search for truth. If they had done any research at all, they would realise that for most home owners, a payout based on the 2007 GV would actually be worth more than a payout at the 2010 market value.
When discussing this with a Christchurch property investor today, he was as shocked as me and said;
“…they have nothing to complain about. 2007 GV is by far better. Bloody idiots, should just shutup and be thankful. “
The offer is initially being extended to 5000 home owners in the “red zone” worst hit areas of Bexley, Avondale, Horseshoe Lake, Burwood, Dallington and Avonside. Owners can accept a pay-out from the Government for the 2007 GV of their home. They may choose to sell the land to the Government and continue private claims with insurance companies. They have nine months to decide what to do but after that time, pundits say the properties will most likely be compulsorily acquired by the Government if the owner has not already taken action.
It’s a guess as to how much this will cost but Treasury have estimated the total cost of red zone properties to be around $635 million.
This is a massive helping hand from the Government (read: “NZ tax-paying public”) and I believe that the homeowners should be grateful. There will inevitably be some who will not get as much as they hoped for their property but on the whole, a 2007 valuation is a generous offer. There are many people throughout the rest of the country whose homes are still not worth what they were in 2007.
John Key announced the plan today with the launch of a website for home owners to check the zoning of their properties. He said that the land in question could take up to six years of remedial development before it was able to be built on, which is why the Government is stepping in to allow home owners to get on with their lives.
There are a total of four zones that have been established.
The “red zone” includes properties where;
- There is significant and extensive area wide land damage;
- The success of engineering solutions may be uncertain in terms of design, it’s success and possible commencement, given the ongoing seismic activity; and
- Any repair would be disruptive and protracted for landowners.
The “orange zone” includes 10,000 houses that require further assessment and may be included in this offer in the future.
Land classified as orange means engineers need to undertake further investigation. If your property is classified as orange, key points to note are:
- The orange mapped areas are where engineers need to undertake further investigation;
- Some of the damage in these areas is a direct result of the magnitude 5.6 and 6.3 earthquakes which struck on 13 June, and has not yet been adequately assessed to provide residents with certainty;
- Orange zones will progressively be classified following the outcomes of further investigations.
Land classified as green means that homes are suitable for repair and rebuild. If your property is categorised as green, key points to note are:
- Homes are suitable for repair and rebuild;
- Property owners should talk directly with their insurer or EQC about repairs;
- Property owners no longer have to wait for the results of any area-wide land assessment reports by EQC or their engineering consultants Tonkin & Taylor;
- There will be some isolated exceptions where geotechnical assessments will be required due to major land damage;
- Repair and rebuilding work should take into consideration the risk of ongoing aftershocks, so some finishing tasks such as brick and driveway concrete laying should be delayed until that risk decreases.
The “white zone” includes properties where;
- These areas are still being mapped or are not residential;
- In the Port Hills, an extensive geotechnical investigation is underway;
- Land issues – rockfalls – are of a different nature than to those on the plains;
- No timeframes have been set for these areas.
It should be noted that there are errors on the site, so it should be taken as a guideline only and any financial decisions should not be actioned prior to confirming details.
