Christchurch at the crossroads

One year on from Canterbury’s big February 22 earthquake, Christchurch property and business owners are facing their biggest challenges.

Business interruption insurance and accommodation rental insurance is running out for hundreds of businesses and homeowners as well as staff this month.

Business leaders are anticipating a likely wave of business and property failures.

And around the country the seismic shocks reverberate as councils close public buildings and landlords come to grips with higher building codes.

The latest casualty this week was a spectator stand at Wellington’s Basin Reserve, deemed too dangerous to use.

In Christchurch, buildings continue to be closed weekly as councils respond to the reports of the Royal Commission into the earthquakes and reports from the Department of Housing and Building.

In Riccarton Rd the closure of a building means five businesses have ceased trading or are scrambling to make alternative arrangements. At Merivale mall, 20 stores were closed while some remain open. Building closures at two primary schools mean that pupils are having classes in tents.

These closures come in the wake of evidence at the Royal Commission, which has revealed incompetence and inadequate action by the city council and engineering firms after the first September 4, 2010 earthquake. These shortcomings undoubtedly contributed to the 200 or so deaths that occurred on February 22, 2011.

On the residential front, 6750 homes are red zoned and 2100 hillside homes are white zoned, meaning final decisions have yet to made about whether they are eligible for the government compensation based on rateable values.

So far only about 2000 sale and purchase agreements with the government have been settled, suggesting that the process has stalled.

The most likely reason is that the remaining red zoners cannot find affordable properties to buy. Most of the remaining properties have rateable values under $350,000 but an average section costs almost $200,000 and a house costs at least $250,000-odd to build.

The city council and cabinet ministers claim zoning changes have paved the way for several thousand new sections. But they are at least one or two years away from completion and there is no evidence developers are dropping prices.

Business and property commentators like retired developer Hugh Pavletich emphasise the need to attract people with development skills and a new attitude from civic authorities.