Landlords profit from slow repairs

Last updated 05:00 21/12/2013

Relevant offers

Christchurch Earthquake 2011

Drone flyover shows big job ahead for repairers of Christchurch's Sumner Rd Police complete report into CTV collapse, no decision on prosecutions Welcome to A-town: A connected community in Christchurch's second poorest suburb National Portrait: Earth's rumblings a fascination for scientist Dr Ken Gledhill Government's 'third power' move on Christchurch red-zoning impinged human rights, report says Grieving earthquake widower shocked dodgy building materials still be used. Backlog of defective buildings and shoddy workmanship sparks calls for building warranties 'Overkill' central Christchurch intersection has 19 lights Home owners aghast at fee for Southern Response class action Court of Appeal seeks to rein in 'shemozzle' arising from CTV building case

"Exorbitant" rental prices are burning through insurance accommodation cover and into the pocket of Christchurch's private homeowners.

Displaced Cantabrians shifting into overpriced, furnished rentals to wait out repairs on their own homes are exhausting their insurance cover for temporary accommodation and being left to fork out thousands of dollars in shortfall, insurers say.

A number of short-term rentals on Trade Me are targeting private homeowners and asking for up to $980 a week - an amount that would quickly burn through an average $20,000 accommodation allowance.

Insurers are advising homeowners to "build some fat" around alternative accommodation plans to allow them financial leeway in case repairs take longer than expected.

Rather than entering the pressured rental market, some customers were choosing to take out a lump sum payment from their insurer to buy "a caravan, sleepout or other structure they can live in, so that they are not left with a huge rent bill each week," IAG spokeswoman Renee Walker said.

"Some homeowners are paying exorbitant rents which very quickly deplete their policy entitlement, meaning they could be left with a period of time that they themselves have to cover the rent," she said.

This issue was highlighted by Bruce McKendry's plight in The Press this week.

McKendry, 79, was told his home would be repaired this month and he has been living in a $875 two-bedroom rental in Addington since September.

The repairs have been delayed and his home will now not be completed until April next year, but his $20,000 accommodation allowance runs out at Christmas.

McKendry was not the only one facing this predicament, Walker said.

IAG was working with an elderly couple who were paying $850 a week to live in half a house; the other half of their home was being used to store their belongings and the landlord was charging them extra for storage.

Their accommodation entitlement was $20,000 and if you add together rent, storage, cattery and moving costs the couple would have just over 16 weeks of accommodation, which may not be enough to meet their repair completion date, Walker said.

Southern Response reported a similar problem and had also introduced initiatives to give customers more options, chief executive Peter Rose said.

"This includes giving customers the opportunity to spend temporary accommodation cover on purchasing a caravan or motor home they can live in while out of their home, kitting out a garage with a kitchen, or paying the temporary accommodation cover out as a lump sum," he said.

Ad Feedback

Insurance Council chief executive Tim Grafton said an average $20,000 accommodation allowance would usually provide a customer with months of rental cover, but "policies aren't written to respond to market conditions".

Landlords charging exceptionally high rentals to capitalise on the current market was a "pretty deplorable action to be taking when people are vulnerable", he said.

Housing Minister Nick Smith said rents had risen significantly in Christchurch, but there was a big gap in the average rent increases and the "excessive" $850 and $875 weekly rental prices that were being reported.

"Never has the insurance market been so robustly tested as with the Christchurch earthquake and we are all learning lessons.

"People have underestimated the degree to which rents rapidly rise when you have a major natural disaster and a real shortage of good quality housing," he said.

The Government was focused on creating more accommodation options for private homeowners and officials would soon be advising Smith on the possibility of building an additional two temporary accommodation villages in Christchurch.

The Canterbury Earthquake Temporary Accommodation Service offers financial assistance to homeowners who have exhausted their insurance cover - a one-person household can receive $180, a two-person household $275 and a three-person household $330.


A three-bedroom furnished home in Spreydon is on offer for $980 a week. The Trade Me advertisement reads: "Ideal for short-term stays while you are having EQC repairs done."

A three-bedroom home in Bexley is available for $945 a week for "families requiring a comfortable house to live in during repairs". A two-bedroom Hoon Hay home, that comes with a sleepout, is $980 a week.

A three-bedroom Mairehau home that is "great for short-term accommodation while your house undergoes its EQC repairs" will cost $910 a week.

The landlord of a four-bedroom rental in Merivale, who is looking for $900 a week, will even "invoice direct to your insurance company if you're having EQC work completed". 

- The Press


Special offers
Opinion poll

Which memorial design do you like most?

Memorial Wall with a reflective pond

Table and Chairs

A Green and Peaceful Landscape

Call and Response

Riverside Promenade

A Curved and Inclusive Memorial Wall

Vote Result

Related story: Christchurch earthquake memorial designs unveiled

Featured Promotions

Sponsored Content