Floodgate: Your letter's in the post
Thousands of Hamilton ratepayers are about to receive news which experts say could slash property values, and affect insurance premiums and future sales of their homes.
And while one Nawton homeowner has become the first to feel the financial sting from the Hamilton City Council's imminent release of new flood-risk modelling, real estate industry figures are concerned ratepayers' worst fears over the impact of the data on property values are about to be realised.
One property lawyer said the impact might not be limited to vendors, with purchasers' banks and insurers potentially reluctant to sign off on deals.
Real estate agent Caroline Hilson said a keen buyer "ran a mile" after city council staff said the property could be inundated by a once-a-century flood, spiking a sale contract subject only to an acceptable land information memorandum (Lim) report.
The council will next week begin sending 28,000 letters to ratepayers whose properties were identified by a botched mailout six months ago.
This time, 6700 will learn they could be at risk of flooding.
Ms Hilson said she expected affected owners to take a big hit if they tried to sell and accused city council staff of scaremongering after they told her and her prospective buyer that the property could go under up to a metre of water.
Her five-year-old house was part of a council-approved residential development between Grandview Heights and Hamilton Zoo.
The four-bedroom home is on the market for $375,000.
Staff have confirmed about 6700 properties have been identified as being at risk of some degree of flooding in a 1-in-100 year flood event.
Lugton's Real Estate manager Simon Lugton, whose office introduced the buyer for Ms Hilson's property, confirmed they had backed out on the advice of their solicitor because of the flood risk's impact on saleability.
Lugton's director, David Lugton, said prospective buyers would pay close attention to the new assessments. "It won't affect the value as much if it's only the land that would be under water, but if it's the house affected, it will definitely affect market value.
"You might find that there's an insurance issue coming up too. If there's a risk identified, the owner may have to volunteer that information to their insurers, otherwise they may find they're not covered for flood events."
Mr Lugton said the new assessments could give ratepayers grounds to challenge the newly released rateable values for their property.
Hamilton conveyancing lawyer Erin Rasmussen said the issue showed the importance of Lim reports, and warnings might attract the attention of lenders and insurers.
Acting city planning unit manager Alice Morris said that until the district plan was notified on December 10, face-to-face meetings were being offered with both the applicants for Lims of affected properties and the owners.
Since the council received the final data on October 30 about 60 Lim applications had been received, including nine within flood hazard areas.
Detailed maps showing all of the specific properties deemed to be at flood risk will be available on the council website by the middle of next week.
- © Fairfax NZ News
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