$600m in payouts - why no boom?
MARTIN VAN BEYNEN
Nearly $600 million has been paid to Canterbury earthquake claimants. So why isn't Christchurch booming?
That is the question many Christchurch retailers are asking as Cantabrians bank about $600m in Earthquake Commission (EQC) payments after the September 4 quake.
The commission pays the first $100,000 of every residential building claim and the first $20,000 of each contents claim.
There are many stories of small windfalls:
A Christchurch couple received $5000 to fix a crack in their living room. They organised their own plasterer and painter and were left with a $4000 windfall.
"They said we would have to paint the whole room, but it's white and we just had the cracked area repainted," the couple said.
Another Christchurch couple received about $8000 for some small repairs but are not concerned about the cracks and have banked the money, with the idea of having a holiday.
An elderly man whose house has been condemned but is still habitable is considering spending his payout and leaving his family to worry about the damaged house.
The commission says it has made the following payments:
Buildings – 26,104 payments of amounts under $10,000 ($88.5m), 1385 payments between $10,000 and $100,000 ($24.7m) and 3703 payments of less than $100,000 ($427m).
Contents – 19,179 payments of less than $10,000 ($32.2m), 1187 payments between $10,000 and $20,000 ($19.4m) and 744 payments of more than $20,000 ($16.9m).
Placemakers Riccarton owner Grant Close said his business had not had much more than a steady increase in sales to contractors doing EQC work.
"We're not seeing a big rush of people coming through to do DIY fix-ups," he said.
"I was a little bit surprised.
"I have been thinking where it's [the money] all going, because it's a lot of money into our very small economy.
"Maybe people haven't done it yet because they're waiting for the aftershocks to finish."
He expected the "full noise" to start in July and August.
Figures supplied to him showed 64,000 repair jobs between $10,000 and $100,000, between 2600 and 5000 total rebuilds, and 8000 reinstatements averaging $175,000 each.
"We are all poised, waiting to go," he said.
"We are all intensely aware that there is a lot of pain and hurt out there.
"Contractors really want to get out there and rebuild Canterbury."
Resene Paints marketing manager Karen Warman said many people were waiting for the aftershocks to stop or building work to be done before painting could start.
Some might be struggling to get a qualified painter, she said.
Smith City managing director Rick Hellings said the company had yet to see any big increase in sales of big-ticket items to suggest people were spending possible windfalls.
Hellings had heard stories about people receiving windfalls but had seen no evidence of big spending.
Westpac economist Brendan O'Donovan said he was surprised retail spending was not showing signs of the increased money flow.
"It could be a timing issue, and some will need repair work done before they spend on replacing items," O'Donovan said.
- © Fairfax NZ News