The number of homes in Christchurch likely to be written off may be in the realm of 12,000 according to Minister for Earthquake Recovery Gerry Brownlee.
Early estimates following the February 22 quake centred on the figure of 10,000 homes that needed to be destroyed, or which were uneconomic to repair. The latest large quakes last Monday are thought to have pushed this figure up.
Appearing on TVNZ's Q&A programme on Sunday, Brownlee was asked whether he would rule out 12,000 homes needing to be destroyed.
"No, I think that’s probably in the realm of that," Brownlee said.
"These are homes that have suffered so much damage it’s uneconomic to repair them," he said.
"And look, the homes fit into different categories, of course. If you’ve got a million-dollar home with NZ$100,000 or NZ$200,000 worth of damage, it’ll be repaired. If you’ve got a NZ$200,000 home with NZ$150,000 worth of damage, probably it would be a marginal call. But there are many others that just won’t work."
Brownlee indicated the government would not need to spend more than the NZ$5.5 billion it set aside in the budget for rebuilding work in Christchurch.
"The government’s set aside NZ$5.5 billion in the last Budget. We would expect that will be pretty much the bounds of government expenditure," Brownlee said.
"A further NZ$3.5 billion coming from EQC, and then an enormous amount – many billions – coming from private insurance. And it’s one of the reasons that we need to be respectful of the position that those companies find themselves in," he said.
Brownlee said insurance companies had been working "very constructively" with the government.
"It’s just as difficult for them: no two insurance policies are the same, and in any street you could have anything up to 12 different insurance policies operating on various houses, so all of that does need to be unpicked a little bit," he said.
Asked whether last Monday's quakes had added to the costs of repair, Brownlee said that was "a little hard to quantify".
"I think what we have been able to assess very, very quickly is that in those badly affected suburbs, a lot of houses that might have had 70% to 80% damage have probably gone into the ‘complete write-off’ category, and similarly, you’ll have an escalation," Brownlee said.
"But outside of that, we don’t see too much additional damage, new damage, if you like. There’ll be some, but the claims so far look to be relatively few," he said.
Wednesday announcement?
Meanwhile Q&A presenter Paul Holmes said political sources had tipped Wednesday for an announcement on what direction the government would look to take in Christchurch.
Brownlee said he was aware of the pressure on the government, but that it was not going to rush things.
"Last week...it just sets you back so much. But a lot of progress has been made, we’ve been able to build on the extraordinary amount of information that’s been collected prior to that time, and I want that decision as quickly as possible," Brownlee said.
"But I don’t want to see people being taken out of the frying pan and into the fire. We’re talking about the lifetime equity that most people have accumulated in their homes."
(Updates with tip of Wednesday announcement)
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