Floods threaten house values
Christchurch's waterlogged homeowners are facing a triple whammy - damage caused by the earthquakes and floods could cause a big drop in property values.
The city's property valuers and real estate agents are calling for fast action to prevent whole neighbourhoods becoming unsaleable.
One city lawyer had a real estate sale "crash" yesterday after an insurer refused to cover a client about to buy a house in the Flockton Basin.
"We expect to see more to fall over, this has got big implications," said the lawyer, who declined to be identified. She warned that the "woolly" references in council LIM reports to flood plans were no longer specific enough.
Property valuer Natalie Edwards said the situation was "daunting and scary" for any owners wanting to sell homes after on-going flooding.
"You'd have to make it so damn cheap to make it attractive. Without any council remediation or plans, they are stuck. Nobody is to going to buy there - why would you?"
Owners who had bought recently in flooded neighbourhoods could face "significant losses" if they resold now, she said.
She called on the Christchurch City Council "to do something quickly".
Quantifying losses of value in the worst-hit areas was almost impossible as sales would come to a halt. "It's going to take a long time for them to bounce back."
Fellow valuer Errol Saunders said everyone needed more information on the council's remediation plans.
"People will be very wary, it will have a significant effect in some areas. In others, it will be seen more as a one-in-100 year event."
He felt this week's flooding could in one sense have done property owners a favour, as it might lead to stronger flood protection work.
Valuer Bevan Fleming said any uncertainty would reflect in prices, and the floods had opened "a can of worms". Properties should be considered on a case-by-case basis, he said.
All three valuers expected insurers to balk at covering such homes and contents, and banks to be reluctant to lend, creating major hurdles for sales.
Real estate agents spoken to by The Press were also expecting a big impact on prices, especially where floods had not been a problem previously.
David Blackwell of Total Realty said agents would have to disclose flooding histories to buyers, while Gavin Topp from Harveys, said some owners selling might try to keep flooding quiet once homes had dried out. Buyers should get detailed information from their local council and have a property inspector "get under the floor" of a home, Topp said.
However, agent and property manager Tony Brazier urged people against believing they could never sell houses in flood zones.
The Government should pay for homes to be raised on higher foundations, and if this were done "then they could sell just as happily" as before. "There are solutions, but something needs to be done."