ChCh may lose 4% of its population

Christchurch may lose 4% of its population permanently over the next year, ANZ economists say

14th Mar 11, 1:27pm by Alex Tarrant

Christchurch may lose 4% of its population - a net 15,000 residents - permanently over the next year due to the earthquake that devastated the city on February 22, making the reaction from government and the business sector crucial, ANZ economists say.

In a comment piece on post-quake migration patterns, the economists said the figure was made up of 9,500 residents deciding to leave permanently, 4,000 fewer migrants arriving from overseas, and 1,500 fewer internal migrants over the year.

The exodus would likely see existing pressures, such as a housing shortage in Auckland, intensify as Christchurch residents moved elsewhere, and as migrants who would have headed for the city went to others instead.

The 4% figure was a rough indicative estimate based on research on how migration flows were affected by weather related disasters, and migration patterns following the Kobe earthquake in Japan in 1995.

From ANZ's latest Markets Focus:

There are reports that as many as 65,000 Christchurch residents have left the city following the February 22 earthquake. This is around 17 percent of the city’s population. While it is understandable that many have chosen to go somewhere else, given the damage to homes, the big question is how many will decide not to return at all and what it will do to future migration trends. And for those that decide not to return, where will they choose to settle?

Looking at estimates of the permanent population loss following some recent natural disasters in developing countries suggest a large variation. The 1995 Kobe earthquake resulted in 2.5 percent of the population leaving permanently3. There was a far higher proportion that left following Hurricane Katrina and Rita in 2005. However, Florida only lost a very small proportion of its population following hurricanes in 1992 and 2004.

These are useful benchmarks, although it is impossible to lump all disasters into the same box. A key differentiating factor with regard to Christchurch has been the extended nature of seismic activity, which will exaggerate the psychological impact on residents. In addition, there will also be changes to the risk profile when businesses think about issues such as locality and where operations reside.

Over the past decade, Christchurch City has benefited from net gains in internal migration (i.e. internal immigration less internal emigration) of around 0.3 percent of the population per annum, or around 1,100 persons a year. Net gains from external migration (i.e. external immigration less external emigration) have averaged around 0.4 percent of the population per annum, or equivalent to 1,600 persons a year.

If we assume that the permanent emigration (i.e. outflows) either to another part of NZ or overseas is similar to Kobe, then there will be a loss of 9,500 people (2.5 percent of the population). In practice, this estimate is likely to be at the conservative end. While there are certainly frictions that will restrict labour mobility (such as selling your house), there are other New Zealand specific factors, such as the higher tendency for New Zealanders to head offshore (especially to Australia), at any given time. The number of permanent departures from New Zealand accounts for between 1½ and 2 percent of the population over the past decade.

Christchurch has also been a net beneficiary of migration from Australia – which goes against the national trend. Migration from England, Japan and Australia dominate the net inflow. Certainly there looks to be immediate risks to immigration from Australia and Japan. And migration research has also showed that NZ has been used at a springboard destination to Australia4. What is less clear is the impact on internal and external immigration (i.e. inflows), which account for almost 3½ percent of the population in any given year.

Of the roughly 7,500 external immigrants (i.e. permanent arrivals from overseas) arriving into Christchurch each year, it is possible that we could see a halving of that in the near-term. In fact this seems somewhat optimistic. And while we could also see a rise in internal emigration, the net effect will likely be far less as there will be people coming in to carry out essential work relating to assessing and repairing the earthquake damage.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

68 Comments

by Wolly | 14th Mar 11, 2:33pm 1300066417

A fair guess...but a guess at that. Time will tell. Let's wait to see the rebuild gather pace. That should suck in several thousand builders, labourers, sparkies, plumbers, engineers, architects, gib stoppers, steel workers, glaziers, drivers, roofers and a bag of criminals out to steal what they can!

by John Kelly | 15th Mar 11, 2:25pm 1300152341

And a stack of women fleeing the man drought in the north.

by Chris_J | 14th Mar 11, 2:43pm 1300067010

4% would probably be the minimum population loss, and much of that won't be a net gain to other regions of NZ but of course to Australia.

I don't think people outside the affected areas grasp the level of destruction.

TVNZ shows streets of Aranui, where the damage to homes isn't too bad, but which are simply abandoned (or in the process of being abandoned) by their more transient tenants. But if they actually took a look around the more middle class areas of Dallington, Avonside, Avondale they would see not just a huge number of totally ruined homes but huge areas where only a few with no where better to go still stay. So many now have no businesses and no jobs as well, and the only prospect for the future are battles with obstinate insurance companies who have taken the view that they will delay and deny claims until their claimants are beaten into submission to accept minimal payouts.

Even those that have encamped themselves in the north-west of ChCh share the same delusions about the scale of the damage elsewhere. There are residential streets in the eastern suburbs where flat ground has been replaced by waves and the houses built upon that ground now sit at perplexing angles that only the illustrator of a Dr Seuss book could dream up.

Even in the CBD the east end of Salisbury St through to Peterborough and the River has every house (even brand new apartments and townhouses) tilted and pitched at considerable angles.

Personally I wouldn't be surprised if there was a substantial decline in NZ's overall population for 2011, possibly 20-40,000. Nor would I be surprised if real growth for 2011 was something like -5% (due to inflation being moderate to high, population decline likely, and a massive loss in productivity combined with those obstinate insurance companies holding back any recovery).

In short, it would be more than foolhardy to believe that the effects of Feb 22 will not define the NZ economy for at least the next decade.

by Kate | 14th Mar 11, 3:46pm 1300070807

...the only prospect for the future are battles with obstinate insurance companies who have taken the view that they will delay and deny claims until their claimants are beaten into submission to accept minimal payouts.

And if you ask me, the fact that we have EQC in there as well means that private insurances have a get-out-of-jail free card when it comes to delay.

Having seen the bureaucracy associated with the first quake and getting claims underway and then settled makes me think EQC is more a hinderance than a help.

I just hope this doesn't turn into another leaky building type fiasco. Many, many of those homeowners have had to carry on living in these damp and unhealthy structures for 10+ years waiting for government/courts to sort that out. I would cringe to think the same might be true of Cantabrians living in faulty houses for the next decade to come while everyone argues for fixing when it should have been writeoff/demolition.

by Andrewj | 14th Mar 11, 2:57pm 1300067861

Chris_J

Thanks for the info. I had friends go down to help, mainly with feeding rescue crews, they just got back. They were amazed at the damage and said we have state censorship when it comes to being told the true scale of damage. I was looking forward to seeing some photos, you mentioned you may send some to Bernard have I missed them?

by Chris_J | 14th Mar 11, 4:08pm 1300072097

I send them to Bernard, he hasn't posted them.

My photos aren't of the worst damage anyway. I was so shocked at what I saw, I haven't taken photos in some areas. There are houses in Bexley where the silt came half a metre into the sunken houses. In a subdivision where houses were being started after Sept 4, the brand new homes are broken and twisted.

The insurance companies are facing heavy losses and there will be casulties but it seems to be National denial at the moment.

Anyway most of the damage is still occuring as liquifaction dries out and houses sink into the ground.

Do people outside ChCh not even realise that the ENTIRE CBD is shut down for the third week (which is one hell of a lot of businesses). Thousands of other businesses are also gone.

It's a National disgrace how this has been handled, between Civil Defence, the Government, EQC and private insurers the whole situation is a giant mess that seems unlikely to be resolved.

Christchurch people don't want talk, we want action in the form of insurance payments and reconstruction plans. For 6 months after September, nothing happened, we are not waiting another 6 months for nothing to happen.

by iconoclast | 14th Mar 11, 3:29pm 1300069795

Alex Tarrant: "ANZ economists say Christchurch may lose 4% of its population".

AndrewJ: "We have state censorship when it comes to being told the truth".

It is the absence of "meaningful information" that is with-held (intentional or not) that makes it difficult to offer accurate predictions. Unless of course these ANZ economists have access to this data.

How can un-named ANZ economists issue those type of statements? Critical information necessary to make "any" meaningful sense of future population outcomes for CHCH is - how many residential properties were un-insured? and how many were under-insured?. A recent example is the "black-saturday" fire-ravaged communities in Northern Melbourne 2 years ago. Nearly 50% of the properties destroyed were either un-insured or under-insured. Today, 2 years later, nearly 50% of the survivors have not returned and indicate they will not or can't return.

by speckles | 14th Mar 11, 4:03pm 1300071823

Many people are stuck financially, psychologically and logistically in Christchurch otherwise they would be out of the city now. In addition, I would be surprised if 65,000 have currently left the area. Flights tell us limited information as I have flown out and into Christchurch six times since the 22nd. People are not required to register ina new area...I'm keeping an eye on the movement of registered children at schools from the area to get an gross proxie for the outflow of people, especially fams, the most influencial economic groupings. Interesting to note the number of children to Auckland is not as large as the numbers moving into North Canterbury as an example. I think a lot are shuffled throughout the south Island from those stats. not that far from christchurch. Yes there are the main groups that are upwardly mobile i.e the east transients and people able to internally transfers with their employers however that is a limited group as a whole.

This earthquake was a bad psycholgical experience for many and so many simply cannot function well currently to do anything. Only a handful of the people that share the 5th floor office in the CBD with me actually can work currently. Actually 4 out of 55 on the floor. Many breakdown after every aftershock, its horrific to see.

On a personal level my associate that had the misfortune to experience the Chrsitchurch earthquake and the Japanese one from Toyko personally felt the Christchurch one felt twice as severe. Gives you some idea how bad the Christchurch one felt ona personal level.

by Elley | 14th Mar 11, 6:04pm 1300079092

Flights definitely don't tell everything. You are right about people going to areas quite close to Chch. There were 60 new students enrolled at the Oxford school as of last week already, and I know it is the same in other Nth Canterbury schools. Quite a few are saying they love it here and don't want to go back to Chch too!

As for work, as a personal example my husband is flying to Auckland this week for a meeting. His contract with a Chch company is coming to an end (they have to relocate out of the CBD, cashflow issues) and he'll be contracting for this Auckland company instead (software devt, we work from home). He had also contacted a few Chch companies but none of them even got back to us - obviously too busy trying to get back into business and keep afloat with the employees they already have. It's not looking good for people who have lost their jobs, can't/won't relocate and can't work remotely.

by Neville C | 14th Mar 11, 5:00pm 1300075216

So, is Keys estimate of 10,000 rebuilds, high or low in your opinion?

by pwilkie | 14th Mar 11, 9:27pm 1300091227

this link is a breakdown of stats on damaged state houses--of the 2600 affected 100 are uninhabitable = 4 % although this may be misleading if they,re all in the one suburb ?---have there been any total damaged house numbers published?

http://earthquake-report.com/2011/03/08/inspection-of-state-homes-in-worst-hit-areas-of-christchurch-complete/

by YoungTel | 14th Mar 11, 5:17pm 1300076227

What of the multi-storey buildings in the Chch CBD that have developed a tilt? I don't know how many there are, but a couple of well-known ones facing Victoria Sq on Armagh St are the Craigs Investment building (the top of which has tilted about a foot to the south) and the 12-story apartment building next door (which has tilted a similar distance or more to the north).

I don't know anything about structural engineering - does anyone know what the fate of these buildings could be? I presume that the buildings remain off-limits until either he tilting is rectified (is this possible?) or until they are dismantled. Whatever, it sounds like it will be an awful long time.

by Chris_J | 14th Mar 11, 6:12pm 1300079545

It's not just those buildings, virtually every highrise has significant issues. Correcting tilting buildings is unlikely given that they will have both shaking damage and foundation settlement issues.

Many concrete buildings in the CBD have considerable damage, mostly modern buildings. Very little CBD office and hotel space will be left when the dust settles.

by Neville C | 14th Mar 11, 6:40pm 1300081257

Remember the earthquake building standard post 1976 is that the building stays up and protects life, not that they are undamaged by earthquakes. (some buildings eg Hospitals, are build to a higher standard that protects from damage). As far as I can see the standard was achieved, NO-ONE died in a post 1976 building.

by Chris_J | 14th Mar 11, 8:42pm 1300088571

Not quite.

More than half of the building fatalities occured in the 1979 CTV building. Many other 1980s buildings barely stayed standing (Grand Chancellor, Forsyth Barr, etc etc and a large number of smaller buildings).

Even buildings only 10 years old suffered irrepairable damage.

Christchurch Hospital isn't up to any high standard and suffered a lot of damage, I doubt the old Riverside wing has much of a future.

Old unreinforced masonry buildings such as the Arts Centre and Christ's College although damaged are standing relatively intact, so there are no hard and fast rules.

A lot of reinforced concrete block low rise buildings suprisingly failed too.

CTV and PGC buildings undoubtedly failed due to resonance, but also because they relied on central (or side) stairwell/lift core for bracing while the rest of the structure was light weight post and column without diagonal bracing or shear walls.

Most new office buildings built throughout the world share the same failings. Japan only saw peak ground acceleration on land of around 25% of gravity from their M9 hence little shaking damage compared to Christchurch's 220% of gravity.

by Neville C | 14th Mar 11, 10:35pm 1300095339

Was the CTV building built to the new standard or designed to the old standard but completed after 1976? The royal commission should clarify.

Many of the 1980+ buildings might be hardly standing, but that is the point, they didn't collapse, and that is what the standards require. Except for the CTV building (and there is debate over what building code it was build under) there was no deaths in buildings built under the 1976 code.

by Chris_J | 14th Mar 11, 11:04pm 1300097077

Again wrong.

There are 10 year old timber framed townhouses that have collapsed. I emailed Bernard the photos but he hasn't published them.

Note that the mid 80s Grand Chancellor all but collapsed and the 1990 Forsthe Barr had stairwell collapses that could easily have been fatal.

Building codes are entirely inadequate, and the evidence is being demolished before anyone but officials can see it, covering up the inadequacy of a huge range of construction methods.

One thing that infuriates me is that post Sept 4 it was obvious stronger concrete pads were needed especially in east ChCh. Instead building continued as if nothing happened, now some of those house built post Sept 4 lie ready for demolition, it just seems ridiculous that the obvious (and relatively cheap) changes weren't made immediately.

by jimmy397 | 14th Mar 11, 11:11pm 1300097518

Agree entirely.

The building codes need to become an awful lot stronger for both houses and commercial buildings.

The other thing with houses is that the land needs to be sorted prior to new subdivisions being built (like how they have done this at Pegasus).

Heritage buildings are fine, so long as they are strengthened to 100% of the code (or more, stronger the better!!). I was in one of these buildings at the time of the quake, strengthened to 100%, I and everyone else in the building made it out without a scratch while the building next to ours (no strengthening) has come down and many others in the street also came down or will be coming down as a result of their damage.

Yes, all of this will cost a fair bit more, but, when it happens to you, you will be eternally grateful that it was done.

by Neville C | 14th Mar 11, 11:25pm 1300098334

I feel like a broken record.

How many people were killed in buildings that were built to the 1976 code?

The 1976 code was to designed save people not buildings. The pre76 code was to build rigid buildings that stayed up until they collapsed (like the PGG building)

It appears you think the buildings are more important than people.

If noone died in 1976 code buildings, then the code was a success. It doesn't matter if they have to be pulled down.

Its like the crumple zone in cars. It munts the car but it increases the chance the the people survive. Or do you want cars that are cheap to repair but kills the passengers?

by Chris_J | 15th Mar 11, 12:25am 1300101912

Neville C

Of the confirmed places where people died (according to the Press last week).

About 95 were killed in the post 1976 CTV building.

15 in the 1960s PGC building.

28 in other building collapses which may include modern buildings.

6 in rock slides.

At least 2 from falling household objects.

And most of those killed by falling older buildings were killed by buildings which had unrepaired prior damage which should have been cordoned or dismantled.

I can't believe tables and chairs were being used outside the Carlton Hotel when in the first quake the parapet on the other side fell. Fortunately no one was there on 22 Feb.

I also can't believe that the Iconic was in use (which killed 2 people I understand). The facade was of no historic significance (all ornamentation had been removed windows replaced and the surface plastered smooth). It was a tall facade with some signs of Sept 4 damage however the wall was not removed or repaired and could easily have been taken down and replaced with a near identical timber framed structure while retaining the rest of the building. The buildings on two opposite corners also had little done to repair them from Sept 4 and both had some brickwork fall. To have young people sitting and standing outside such a building (it was a bar) after the inital damage was just irresponsible.

But the reality is that the biggest killers were the big modern buildings. If Forsyth Barr had gone to (as it nearly did) or any of the other big buildings the number of casulties would have been magnitudes higher.

by Chris_J | 15th Mar 11, 12:51am 1300103493

"It appears you think the buildings are more important than people."

Besides that comment being entirely inappropriate, I will say that just because a building is old doesn't mean it's dangerous. And just because it's new doesn't mean it's safe.

Old timber buildings performed almost as well as the modern ones despite having limited bracing, years of alterations and a bit of borer.

It's easy to make old timber buildings virtually earthquake proof (aside from liquifaction issues). Gib lining all ceilings removing brick chimneys and adding some bracing shear walls will make them just as safe as a modern building.

It's also not that difficult (but not cheap either) to make an old unreinforced masonry building (even a damaged one) safe. Side brick walls can be replaced with braced timberframed walls or reinforced masonry walls. Ornate facades can either be deconstructed and rebuilt in safe or reinforced materials with original window joinery and other fittings. The interior structures of these buildings are predominantly timber framed and only need a little extra bracing installed. Of course there are plenty of methods for safely retaining entire facades as well, such as using steel structures. Having safe verandahs is also important. (Many timber buildings had awnings almost collapse just because of their cantilevered design).

Current building codes DIDN'T prevent building collapse and those concrete structures that nearly failed and are now irrepairable did not act like crumple zones - some totally failed. There are 2 level concrete block flats that became one level (I've sent Bernard photos), that is not something people can walk away from. Dozens of modern concrete buildings would have fallen had the shaking lasted only a few seconds longer. Current codes need changed and were responsible for most of the severe damage to the CBD that will take the longest time to repair and have already cost the most lives.

by speckles | 14th Mar 11, 8:46pm 1300088793

I could count on one hand the number of large substantial buildings in the CBD which are clear and green stickered, it really is that bad.

by John Kelly | 15th Mar 11, 2:49pm 1300153783

Will this give us an opportunity to reduce the size and height of Cathedral Square?

by powerdownkiwi | 15th Mar 11, 3:07pm 1300154879

your point? :)

by John Kelly | 15th Mar 11, 3:17pm 1300155440

Cathedral Square is a large, windy, shaded place. If it were smaller, and surrounded by low rise buildings, or possibly divided up in some way, it would be a more appealing location. Is that what you mean by a 'point'?

by Wolly | 14th Mar 11, 5:35pm 1300077346

"Prime Minister John Key has announced a Royal Commission investigating the reasons for the devastation wreaked by the Christchurch earthquake."

Terms of ref yet to be written...buckets of whitewash being mixed imo...not a mention of the facades of shit that crushed so many..all about the PGC and CTV mess...

I have a bad feeling this country is about to be shamed on a worldwide stage.

by iconoclast | 14th Mar 11, 6:22pm 1300080163

Was that 1996 video documentary about shaking and liquifaction in Christchurch authentic? genuine? or was it a mockumentary? If it's genuine then an early royal commision will keep the plebs entertained until election time.

by Chris_J | 14th Mar 11, 8:50pm 1300089000

Absolutely genuine, I recall seeing that at the time.

The prediction of failures of 5 to 6 storey buildings by resonance came true, about the only 6 level freestanding buildings in the CBD were the PGC and CTV buildings. I note that other similar size buildings in the west of the city (University and Hornby) that don't have seismic upgrades are sitting ducks. Note the Hornby one is in use! The Uni ones are currently red stickered.

by FCM | 14th Mar 11, 9:15pm 1300090553

Chris J you are right. Six months on from the first Earthquake and nothing major happened. EQC now going to asses every house again, what a wate resouce as some areas Lincoln, Rolleston etc little if any damage with this one. They are going to delay the rebuild and spread it over 6-8 years. All insurance companies have set teams up for this period as they know it will take this long. If you had the cash a lot will mov e away sort insurance etc out elsewhere then may look coming back after this. But experience from New Orleans will tell you that large areas will be left in ruins for years to come , woudl you stick around? EQC processes are some of the worst logistical system's I have ever seen, can't get a straight answer from anyone....ring back in three weeks is the normal response.

by Chris_J | 14th Mar 11, 9:44pm 1300092287

FCM, it's true. Why is there no uproar reported in the media. Why does the TV and print media ignore the reality and defend government policy.

The Fletcher's deal was absurd. EQC's performance totally inadequate. And everyone else ducking for cover. The Government's handling has been more than wanting. Why is there no protest?

Anger is building FAST (unlike the city).

by Justice | 15th Mar 11, 9:58pm 1300179521

Heard of the 'silent majority'? They are the very people who ruin this country. They are gutless voters who like ramming their head against a wall time and time again hoping for a different outcome!

by Gummy Bear Hero | 15th Mar 11, 10:14pm 1300180497

" Heard of the ' silent majority ' ? " ........... that has gotta be the funniest line printed here at interest.co.nz today ! .........Well done , had to laugh out loud .

by Sunny Nelson | 14th Mar 11, 9:30pm 1300091434

Fortunately we shifted from Chch to Nelson in May last year.

My sister in law is moving from Chch down to Queenstown ... plans to rent out her house once it is livable again.

1/4 guys that I worked with in Chch will probably shift to Oz and rent his house. His drive to work now takes 90 min instead of 30 min before the Feb quake due to smashed roads and constant traffic jams which is driving him nuts.

Ray White are predicting 25% will leave permanently but that seems a bit high to me. http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/4763525/Christchurch-earthquake-Ray-White-cuts-Christchurch-offices-by-40

"White said the firm was forced to close offices as an expected 25% of Christchurch residents were likely to permanently leave the city"

Since Hurricane Katrina New Orleans population has shrunk by 20%. But I don't think their CBD had much damage, so maybe Ray White estimate isn't too high after all?

I personally guess approx 10-15% of Christchurch residents could leave permanently over the next couple of years. Expect most would go to Oz or Auckland.

Also after Japan's quake and tsunami I guess at least a couple of % of Wellington residents will also decide to bail out in the next couple of years since they have similar megaquake / tsunami risks. Much better to shift before a quake, sell house for ok money now, improve safety + avoid huge stress and insurance/rebuild hassles after a big quake does hit. And it seems like new immigration to Wellington will also be reduced + house prices in low lying areas there could easily drop 30%

Unfortunately it's hard to see much silver lining for NZ in all of this.

by powerdownkiwi | 14th Mar 11, 9:49pm 1300092586

Sunny Nelson -

"Unfortunately it's hard to see much silver lining for NZ in all of this".

No, this is a great opportunity, a great excuse, to get society onto a sustainable footing.

The CBD infrastructure evolved like Topsy, to fill a need in the era of cheap energy. It was - as the video suggests - the action of an arrogant species, too.

That was changing as we speak - what better chance to build for the future?

Sure, there will be folk who can't handle the after-shocks any more, but statistically you're better off in an area that has had its adjustment. Where they gonna go - floody Brisbane? 'When's the next cyclone' coastal Queensland? Bushfired and flooded Victoria? I've lived in all of them - and chose here.

If your 'silver lining' means 'increasing wealth for everyone', though, you'd be right - but that was a 'goner' irrespective of the earthquake.

by Elley | 14th Mar 11, 10:39pm 1300095597

"statistically you're better off in an area that has had its adjustment" - well, yes, but we were already told that the first time (post Sept 4th) and we know what happened. I've talked to a number of friends in Chch and like us, they kind of expect that it will happen again (I mean soonish, not in a thousand years' time). Or at least they don't think anymore that we're "sweet" now because we've had our big one.

The housing problems that don't get fixed are an issue too regarding Chch being able to retain its population. Friends who came at the week-end were telling us how they still hadn't had their chimney and other smaller problems fixed since Sept 4th. In fact, a builder was finally due to come and see them on the afternoon of Feb 22nd. Needless to say he didn't come, and now their problems have got much worse. Big gaps and cracks around the chimney which means that not only can they not use it but it is not safe (could fall through the living/dining on the kids in any significant aftershock) and they also have water leaking in the dining (through gaps around the chimney). They are worried about how they're going to heat the house this winter and how much extra it'll cost them to use electric heaters... and they are in the north-west which isn't as badly affected as eastern areas. Although they are "lucky" to have sewerage back they are also sick of having to boil water for everything (also adding to electricity bill). There are always worse situations but I'm not sure how long people will put up with staying in Chch if the living conditions are poor and if there is also not enough work (for anyone except in the building industry).

by powerdownkiwi | 14th Mar 11, 11:05pm 1300097157

Elley - that's something that annoys me about our society.

We only allow 'authorised' people to do things. Heck, two generations ago everyone in this country could do everything. Many built their own homes, fixed their own cars, did their own tap-washers.

I regret the passing of that 'general competency'. Give me a day (max) and $100 in materials (max) and I'd have your friends dry for winter.

It wouldn't be 'approved' but it would work.

Interestingly, all that regulatory/approved/qualified stuff will unravel in the face of resource scarcity and power-down. It's happened already, but nobody recognises it for what it is yet - for instance, when heart rimu was available, we didn't have to treat timber, didn't have warping studs, and the structure was stronger too........ that resource is gone, and the lesser replacement is pinus (cardboard) radiata, which need treated and breaks every time you sneeze.

cheers

by speckles | 14th Mar 11, 10:16pm 1300094196

No one has a clue how the demographic will change, many businesses are using it as opportunity to cull, last year was a horrible year for business in CHCH with many having to write a cheque to keep their businesses going(capital injection). That was occuring prior to the September earthquake based off last years 31 March financials.

When we see how many children return to schools in Christchurch this and the next few weeks we will get an idea how many have been lost immediately from Christchurch.

A cold winter with no action from the powers that be will determine when the next exodus occurs.

Personally I see population growth in North and South canterbury if most substantial businesses are retained, they are now trying to do this by the ICANZ sponsored conference.

For most small business owners they need to sell their business and property to move, both locked up or lost leaves you stuck. The social problems here will be immense. Mental health will be the growth area.

The five people that I know that have transfered out to Auckland see it as a stepping stone to Australia.

The bank staff all want to get to Melbourne.

by Sunny Nelson | 14th Mar 11, 10:23pm 1300094609

Good comments PDK and Speckles

You are right there will be silver linings in Chch - they just won't increase overall wealth.

Businesses can cull / downsize and get more profitable if they can survive this winter

Lower population = big increase in rentals = lower rent costs

Lower population = less traffic congestion once roads are fixed

Lots of nice new parks in CBD

More energy efficient / warmer houses once they're rebuilt

etc

I think Speckles is correct that a lot of people who currently expect to stay will change their mind in 6 months if there is little progress rebuilding + lack of jobs / money. That's why I was saying Chch population decline would be spread over a couple of years.

I was also talking to a Nelson builder the other day. He says it's very quiet up here but he's only heard of a few Nelson builders that are looking at work in Chch as they don't want to work for Fletchers + work out of town. So if the same applies to other builders from AKL etc then shortage of builders means Chch rebuild will take a very long time which will increase the population decline.

by powerdownkiwi | 14th Mar 11, 10:38pm 1300095510

Builders - nah, just think outside the square.

If my house (a one-off) could be put up in 42 man/hours (walls and roof - call it 'closed') and for less than $500 sq/m in todays dollars, then by the time they were production-lined......

The trouble is that we still think in terms of 4x2 - an existing workforce in a comfort-zone.

Prefaricated panels (exterior cladding / insulation / interior cladding) in standard sizes (2.4 x 1.2 say) which slot/clip together, are the key.

by pwilkie | 14th Mar 11, 10:55pm 1300096523

honest answer here murray--- is it totally finished ?

by powerdownkiwi | 14th Mar 11, 11:02pm 1300096971

haha - end-cappings, spouting on the conservatory to go outside (they've been lying there ready to go for years) and skirting boards inside (ditto). It's never been important enough.

But that's not relevant to the 'what can be done' argument.

You have to realise that such a panel system (it doesn't have to be coloursteel inside like mine) is painted - 'finished'. You could also have the services pre-installed in the panels at the factory - no more plumbers wrecking the strength of a stud with a 50mm hole through 90mm timber, done one-off on site ........... you'd just have a 'shower' panel, or a .....

by Gertraud T. | 14th Mar 11, 11:15pm 1300097728

Just heard about MOX fuel, which is used in the no.1 reactor in Japan, the one which exploded today after no.3 reactor earlier.

This is alarmingly much more dangerous than the usual Uranium fuel used, because MOX fuel contains more fission products than Uranium spent fuel, an accident in a MOX fueled plant is much more damaging than Tchernobyl in 1986.

More links at:

http://sherriequestioningall.blogspot.com/2011/03/japan-exploded-nuclea…

As I m no nuclear physicist, is there somebody in NZ knowledgeable about this?

by Kunst | 15th Mar 11, 12:03am 1300100604

Here another link: http://en.wikipedia.org/wiki/MOX_fuel

I think one of the greatest problems with this and other technologies, the majority of the population don’t know much about nuclear power stations and only 10% how they work and the big secret maybe not even 5% know the components and fuel they are using. So, we all relay on controversial so called “experts”. Can we trust them ? Certainly not !

by pwilkie | 14th Mar 11, 11:18pm 1300097895

man after my own heart --why do today what can be done tomorrow--i,ve got a 2 year old kitchen with no tiles + no paint--mrs pw getting slightly stroppy--re your prefab style nothing wrong with the concept except lots of punters having a house built strive for an individualist result--ie look at me---- especially when it,s being paid for by an insurance co and so are less likly to head down the road you,ve gone--cheers paul w

by powerdownkiwi | 14th Mar 11, 11:26pm 1300098362

fair comment, but if you look at them, most houses are just boxes. It's the gingerbread that makes them appealing, and that applies no matter what the box is made of.

go well

by magerti | 15th Mar 11, 8:45am 1300131920

The west of christchurch is a microcosm...almost. I have seen only a little damage - it hasn't really "sunk-in" yet. I was made redundant in 2009 by a govt dept in a process designed to retain sociopaths and arse-kissers - and get rid of anyone with a back-bone (we are hard to manage). There are no protests, because NZ society has kicked out almost everyone who doesn't tow the line. There were no jobs BEFORE sept 4 in christchurch. But also, the CBD was suffering HARD before sept 4 - I walked from South City mall to the square, and may be one in every three shops was empty - with "for lease signs" out the front. Feb 22 made me glad that my wife and I hadn't bought a house. I have a mate who owns a business (10ish employees), and he is having headaches with leases and the insurance company - he paid his premium for replacement value, but they are talking about only giving him depreciated value.........

Lets face it, NZers are NOT nicer than other people, we DONT have the most beautiful scenery, and we are NOT clean and green....

But just thank the gods we don't have nuclear power plants......

by Snarlypuss | 15th Mar 11, 8:55am 1300132559

"Replacement Value' is "Depreciated Value" as many people are about to find out. Like a car, they will replace it with a like for like; a 1995 Toyota for a 1995 Toyota, or cash equivalent. Unless you have an Agreed Value policy for what you paid for it, a 50 year old house is likely to be worth pretty much nothing.

by Chris_J | 15th Mar 11, 11:55am 1300143318

The law requires insurance policies to be written in plain English.

My full replacement policy clearly states that if my property is totally destroyed the insurer will replace it with a new one of the same size. Unfortunately their stalling tactics and confrontational attitude mean that many claimants will be beaten down to take less than they are entitled to. Government intervention is needed and all we are getting is the Government backing Fletcher's to rip everyone off, it's all just one giant nightmare.

People aren't willing to take this kind of garbage. We want solutions not stalling and inaction.

by Elley | 15th Mar 11, 12:19pm 1300144759

Where did you see that replacement value = depreciated value? Like Chris_J, our home insurance policy clearly states that the house would be rebuilt to the same size, using the same or similar materials and if possible to the same plans. There is no $$$ value on it, they basically have to rebuild to these specs whatever the cost per m2 at the time a rebuild is required.

I also asked them (6 months before the Sept quake, when we moved in), what would happen if after an earthquake the land was not suitable for building any more and they said in that case the house would be rebuilt to those same standards elsewhere (ie, on another section that we bought).

by Snarlypuss | 15th Mar 11, 12:34pm 1300145691

I obviously don't have your policy in front of me, but I'd suggest the words " similar" may be the clue. Insurance companies 'replacement' definition tends to be 'we'll put back what you had'. And if it was a 5 year old house, it will be 'made' of 'similar' 5 year old materials- obviously not a vialble option- or pay out the depreciated ( similar) sum. It's like the car example used. I can only say, that's why I had an 'agreed sum' policy- and it cost me more for it. ( Chris_J's policy appears to do that if it states 'new' as the replacement )And that's what poster 'magerati's ( 8.45am) friend is up against.

by Elley | 15th Mar 11, 12:44pm 1300146268

I haven't taken the time to dig the policy out but from what I remember the "similar" was in the case where a material that used to be used had become obsolete (in other words, not produced or available any more). There is nothing on the policy suggesting a pay-out so they definitely have to replace. Still, I'm really hoping for the house not to fall down just yet!

Is the "agreed sum" in your policy adjusted for inflation from one year to the next? I'd think so as 300K now might not buy much in 20 years' time.

by Snarlypuss | 15th Mar 11, 12:54pm 1300146877

I'm sure you won't need your policy, anyhow. So not too worry. But each year I had a renewal specifying the amount coverd in $ terms, and it was up to me to amend the amount of cover, if I chose, and ask for an amended premium figure. The amount, of course, had to be within the bounds of what the company had first insured the house for. ( they didn't want me burning down an overinsured house!). Your car policies will work along the same lines, if you have a look at the next renewal. Insurance isn't really about 'making whole'; it's about 'minimising loss'.

by Elley | 15th Mar 11, 1:01pm 1300147304

OK, sounds fair to me. It is weird because to start with I was keen to have a specific sum stated but they basically told me that the "replacement" cover was better. I have just had a look at the policy now and it does say that they will repair to an "as new" condition with materials commonly used at the time of repair. It also says that the sum insured, although not stated as a $$$ value, is for "full replacement costs". In our case the house is new but there doesn't seem to be any provisions indicating that an older house would get treated differently.

Anyway, I have my fingers crossed that there is no third big one in Canterbury for another few hundred years. My family has been lucky so far but it'd be terrible for a lot of people who've already to deal with more than they could handle.

by iconoclast | 15th Mar 11, 1:21pm 1300148486

I stand to be corrected on this but I think "agreed value" is common practice in car insurance only, but not house insurance. Replacement insurance on a house means exactly that and includes demolition costs, site clean up etc, etc, then rebuild. In the case of Elley if your building costs are $1,250 per sq/m then you should obtain a sq/m update from your builder each year, calculate the cost of building your house at the new rate, and then review and revise your sum insured with your insurer on the anniversary of the policy. Insurance companies are not dumb. They are awake to both under-insurance and over-insurance.

by Snarlypuss | 15th Mar 11, 1:28pm 1300148918

Perhaps it may be my terminology, then :), as I paid to keep my 'agreed' $ amount current as time passed ( pretty much the way you suggest to amend the amount each year). If I have paid a few extra dollars to do so, unecessarily, and those who have lost their houses now are made whole, then that's a good outcome for those concerned.

by Elley | 15th Mar 11, 1:33pm 1300149195

I don't think I should do this actually. As mentioned above, on the line "sum insured", there is no $$$ value, it simply says "full replacement costs" (whatever those might be, in other words, I don't need to know what they are). The description of "full replacement" is defined earlier in the policy as "repairing to an as new condition using materials bla bla bla".

So if they do what they say (which is what I pay for each month) I don't think I actually care about the building cost per m2 at the time of repair/rebuild, should that time ever arise. It's their problem and the premiums I am paying are supposed to reflect that. It's my take on it anyway :)

by iconoclast | 15th Mar 11, 1:45pm 1300149929

Elley, here's why you should. I'll talk in terms of squares which is approximately 10 sq/m. A low cost house with minimal quality fitting/finishing, costs approximately $12000 per square, a house with moderate quality, fittings and finishing is $15000 per square, while a high quality house with top quality materials and fittings and finishings is $18,000 per square. So in the end the owner of the $18000 per square house will not want it replaced with a $12000 per square house. Same size each example. How do you demonstrate that. Keep your original building contract, and get an update each year for safe keeping.

by Elley | 15th Mar 11, 1:54pm 1300150449

Good points from you both. I might switch to a specified sum insured policy after all!

by Snarlypuss | 15th Mar 11, 2:10pm 1300151458

And just to finish off....maybe we're all right !

"Replacement Cost Basis - ...... On Home's, you want this coverage, but it does require annual updates to keep your house insured to value"

http://www.facebook.com/topic.php?uid=124048004939&topic=13428

by Wolly | 15th Mar 11, 12:28pm 1300145326

But we did have a nuclear accident Magerti and the remains of it are buried in the Ohio valley tip in wgtn...!

by FCM | 15th Mar 11, 9:06am 1300133191

The worse thjng that the government did was give Fletchers the power to control the building work. EQC are hopeless at paying people, I have no idea WHY, as an AP system can be brought of the shelf at any computer store that would handle 500,000 entries. I was told that the claim went from CHC to WLG to AKL back to WLG and then over the Brisbane..no wonder everything gets lost you have to have a process in place that can be easily scaled up or down at a flick of a switch, basic admin.

Builders etc will not do EQC work as they find it hard to get paid, WHY WHY WHY. This is not one or two individuals moaning but whole neighbourhoods in this position , and about to get worse with winter on the door step.

by Wolly | 15th Mar 11, 9:11am 1300133472

You miss the point of having a vibrant old boys club FCM !

by magerti | 15th Mar 11, 9:13am 1300133583

Thanks Snarlypuss. I will make sure I don't fall into that trap myself.

Still, I feel bad for my friend - it is people like him that employ a decent number of people and create value (as opposed to importing goods for retail) that are needed to rebuild and recharge the economy.

by FCM | 16th Mar 11, 9:24am 1300220685

Elley you may also want to check your contents, which makes up a lot of the house value. A huge number of people only have about $100k or so, remember your contents covers carpets, drapes, showers etc etc...it costs very little to bump this up and it is an option that people should be aware of.

by Elley | 16th Mar 11, 9:40am 1300221610

OK, so now I am really completely confused. To me showers, carpets, tiles etc are part of the house should it need replacing. In other words, it was part of the contract price when we signed with our building company (as were built-in wardrobes and similar). This (including model numbers for stuff like baths) is all written down black on white in the building spec. Full replacement means to me rebuilding the house as it was prior to an event. If the floor coverings are not included then I really don't get it. I don't see how the house could be claimed to have been repaired to an "as new" condition as per policy if they left a bare concrete slab for example. Our contents cover is definitely less than 100K, around 60K if I remember well and that's mostly to cover for big/pricey items like computer gear, photography gear, my piano, curtains/blinds.

That aside, I also contacted the building company yesterday following suggestions to obtain an updated value each year for the house. They told me they had never done this for any customer and that it would be a time-consuming exercise. They said that a good ballpark figure would be to add 5% per year for the increase in material + labour costs. It's a big increase. Sounds like it's the best I'll get but it makes me wonder how house prices will remain flat or drop if building costs truly increase by that much each year (unless we don't need any new housing stock but I don't think it is the case).

by petrus1942 | 16th Mar 11, 10:09am 1300223362

I assure you that increases in building costs go on at pace! And 2.5 - 5.0 % per annum sounds about right based on current experience; & my 32 years building about 800 houses.

As to whats going to happen in the housing market? I can categorically state with 100% accuracy that I have no idea!

by powerdownkiwi | 16th Mar 11, 10:29am 1300224556

Petrus - I'll take a stab at that.

A premium will evolve on smaller, less-complex, easier-maintained, less energy-demanding houses.

Driven by demographics (in NZ), by energy constraints, and by wealth-making constraints brought on by energy constraints.

Solar orientation (access to all-day sun, North orientation) will be in the mix also.

Something like the HERS will become the tick-sheet, and will eventually (say by 2020) influence bank/insurance acceptance.

by FCM | 16th Mar 11, 10:04am 1300223046

Hi you need to read your policy, carpets , drapes etc are contents. Full replacement is just that they will build your house to the same sq meters (they may even re use your kitchen, bathroom fittings etc in the re build depending on your policy) , which soemone else has touched on here. Agreed value is the value of house you agreed on , but you can have combination's of both etc..which is what a lot of people in CHC are soon going to find out.