Govt plans leaves 10,000 quake-hit owners in limbo

More than 10,000 quake-hit homeowners are still in limbo after the Government today outlined where rebuilding in Christchurch can take place and wrote off about 5000 homes.

The city has been divided into four colour-coded zones including a residential red zone, which covered land unlikely to be able to be rebuilt on for a considerable period of time, and homeowners faced disruption that could go on for years.

About 5100 homes were in the zone, which covered areas along the Avon River in east Christchurch including parts of the hard-hit suburbs of Avondside, Dallington, Bexley and Avondale.

Area in the northeast of Christchurch, including parts of suburban Brooklands, as well as the beach area of Waimakariri District were also in the red zone.

Meanwhile, about 10,500 homes in the residential orange zone were still in question following damage from the June 13 aftershocks, with about 9000 in the Christchurch City Council area and 1500 in the Waimakariri District Council area.

The Government described the orange area as a "hold-zone", saying the land damage there ranged from moderate to very severe, and that more investigation was needed to determine whether land repair was practical.

There was a risk that further aftershocks could cause the land to move horizontally towards water, opening up cracks and causing the surface of the land to drop in some areas.

With regard to red zone property owners, Prime Minister John Key said those owners with insurance on September 3 -- before the first major quake struck -- would have two options.

The first was that the Crown would make an offer of purchase for the entire property at current rating value (less any built property insurance payments already made), and assume all the insurance claims other than contents.

The second option was for the Crown to make an offer of purchase for the land only, and homeowners could continue to deal with their own insurer about their homes.

Mr Key said the Government hoped to go to those residents with an offer within eight weeks, after which they would have nine weeks to consider.

"In the meantime, if residents wish to leave their badly damaged homes in the red zone they should talk to their insurers about accessing any unused portion of their temporary accommodation allowances immediately."

The estimated the net cost to the Government would be $485 million to $635 million once it had received payments from EQC and insurers, and the costs would be met from the $5.5 billion earthquake recovery fund.

Mr Key said it was the assumption that some properties in the orange zone would move into the red zone.

"I appreciate that we're asking people to have a bit more patience with us," he said.

"We understand intensely the frustration for those homeowners, and we know that it's a really difficult time for them, but we have to put them in a position where they can get the best information, it's got to be right and that balance has got to take place."

About 100,000 homes falling into a green zone were given the all clear, with Earthquake Recovery Minister Gerry Brownlee saying those residents no longer had to wait for the results of any area-wide land assessment reports.

"There will be some isolated exceptions where geotechnical assessments will be required due to major land damage, but for the most part Christchurch can get on with rebuilding," he said.

"Repair and rebuilding work should take into consideration the risk of ongoing aftershocks, so some finishing tasks such as brick and driveway concrete laying should be delayed until that risk decreases."

The final zone, the white zone, which included the Port Hills and the central business district, were still being mapped or were not residential land.