About 10,000 earthquake-damaged Christchurch homes will have to be demolished, Prime Minister John Key says.
Key gave the warning at a press conference this afternoon, where he also announced a memorial day for victims of the devastating February 22 earthquake.
It is estimated that 100,000 houses in the city have suffered earthquake damage.
Key said New Zealanders must brace themselves as a number of heritage buildings also required bulldozing.
Some parts of Christchurch may never be able to be rebuilt on, mainly because of the liquefaction caused by the quake, Key said.
There was more temporary accommodation available in Christchurch than people were taking up. Many people didn't want to move from their homes, he said.
Among those buildings damaged in Christchurch is AMI Stadium, where Rugby World Cup matches were to be played. Key said it should be known whether the stadium had any serious structural issues within a few weeks.
However, it was known there was liquefaction on the turf and some stand damage.
The memorial day will be held on March 18, at Hagley Park, and legislation will be required to make it a provincial holiday so the people of Canterbury can attend. A heavy international representation is expected at the service.
Canterbury businesses will have to give their workers the day off for the one-off event.
Key acknowledged there would be costs, but it was a "trade off" because people wanted to mark the event.
The memorial service is likely to be televised and Key expected others around the country would want to mark the day.
The Prime Minister also confirmed that flags on Government buildings would be raised from half mast tomorrow, at 12.51pm to mark the time the devastating quake struck on February 22.
Also from Key today:
* Eight million dollars has been handed out in Civil Defence grants.
* The EQC will start assessing houses from next week.
* More chemical toilets will be brought in from overseas are there are not yet enough on the ground in Christchurch.
* Ninety nine percent of Christchurch houses will have power by tonight.
MORE VICTIMS NAMED
Police today released the names of three further quake victims. They are:
Betty Irene Dickson, 82, of Christchurch
Joanna Clare Didham, 35, of Christchurch
Yoshiko Hirauchi, 61 of Japan
Meanwhile, hundreds of friends and family of Lyttelton man Owen Morris Wright have sent him off with a "DIY funeral" he would have loved.
Mr Wright, 40, survived the initial earthquake at his Joinery By Design business, but was killed by falling boulders in an aftershock as he tried to get home to his family.
There was standing room only at the Aurora Centre in Burnside High as tributes flowed for a man known affectionately as 'O' who prized his family above everything.
His father, Tony Wright, spoke of an enthusiastic and confident son who had a love of the outdoors including diving, fishing, tramping and hunting.
His son's coffin, made by workmates and family from leftover macrocarpa used to build his family home, and a family-designed order of service lent the proceedings a DIY tinge, he said.
"It's a do-it-yourself sort of funeral think O would have appreciated that."
Mr Wright's wife Megan and children Sarah, 6, and Eric, 4, emotionally remembered their devoted husband and father.
"You're the love of my life, you're my best friend and the best husband you could ever hope for you've been a wonderful daddy and don't worry, I'm going to look after them for you my love. I love you and I'll miss you forever," Mrs Wright said.
His brother-in-law, Paul, said Mr Wright had welcomed him warmly into the family, acting as MC at his wedding.
It was still hard to imagine he was gone and the news had been a shock to everyone.
"It felt like there had been a mighty totara - tall, strong and grounded - that had fallen that day."
After the service Mr Wright's coffin was placed into his beloved Land Rover before being driven through a guard of honour of guests assembled outside.