Problems in 'as-is' market

LIZ MCDONALD
Last updated 09:17 20/11/2013
Balmoral Hill
PRIER MANSON REAL ESTATE

ALL OFFERS CONSIDERED: Like something out of a magazine, this Balmoral Hill ‘‘as-is-where-is’ home, without repairs or insurance, is on the market.

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New rules could force owners to reveal details about damage to homes for sale or rent, as concern grows about unrepaired and uninsurable houses.

The Government has confirmed it is looking at ways to address problems emerging with the as-is-where-is housing market in Christchurch.

Real estate agents are doing brisk trade selling uninsured homes, especially to landlords, and sellers have been accused of pocketing quake payouts for claims they are not disclosing to buyers.

A spokesman for the Canterbury Earthquake Recovery Authority (Cera) said the main issue was the information available to buyers, sellers and tenants.

Cera is working with the Ministry of Business Innovation and Employment, and agencies and industry groups, to try to address the problems. The work is in its early stages.

The move follows the hot topic of damaged-home sales being aired in the media, at a Residential Recovery Workshop run by Cera, and at a recent Rebuild and Recovery public forum.

Earthquake Recovery Minister Gerry Brownlee acknowledged at the forum that as-is sales were "a problem that is certainly emerging, and one we need to put a great deal of thought into and have solutions for".

An east Christchurch resident at the forum described his neighbourhood as "halfway to a shantytown", with about four neglected as-is homes in view from his window.

One resident in a Burwood subdivision complained to The Press that the sale of a nearby home in as-is condition was bringing down his neighbourhood.

Noisy rebuild workers with "cheap cars" had moved in as tenants and the home was run down said the neighbour, who did not want to be named for fear of being labelled "a snob". The house had a rating value of close to $500,000.

"No-one is going to start spending hundreds or thousands of dollars on a rental property like that," he said. "They're all going to deteriorate. This was a nice area."

Labour earthquake recovery spokeswoman and Port Hills MP Ruth Dyson said the issue was a problem for the whole city, as well as those directly affected.

"There's a moral argument here. Money is paid out for repairs, it should be used for repairs. Having all these uninsured homes is a societal risk."

Dyson said central or local government could require details of damage and insurance go on council LIM (land information memorandum) reports until repairs were done, or be listed on sale and purchase agreements.

"Full disclosure should be required," she said.

Clayton Cosgrove, Labour MP for Waimakariri and Earthquake Commission spokesman, called for action along the lines of a housing warrant of fitness.

"People are struggling to find homes.

"There's an issue of people being exploited and being put in awful conditions and charged rent for it. That's something Mr Brownlee should be looking at," he said.

The Government is developing a warrant system for trial with state houses, but has no plans yet to extend it to private rental housing. Both the Citizens Advice Bureau and the Green Party have called for a compulsory scheme for all rentals.

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DAMAGED HOME FAR FROM RUN-DOWN

The phrase as-is-where-is in real estate advertising conjures images of a wreck surrounded by knee-high weeds.

But this Christchurch home is more like something from the pages of a glossy magazine. Complete with magazine-style decor and ocean views, the $3 million Balmoral Hill house has joined the list of damaged homes for sale without repairs or insurance.

The ads call it a "chance to secure one of Christchurch's premium hill properties for a fraction of the price!" and promise all offers will be considered. The 552 square metre house comes with a grand foyer, outdoor and indoor living areas, a guest wing, inground pool, triple car garaging, and 2.25 hectares of land.

The Christchurch City Council's 2007 rating valuation is $1.83m for the house and $1.25m for the land.

Ray White real estate agent Craig Prier said someone "was going to get it for a fraction of what they may [otherwise] have paid".

- © Fairfax NZ News

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