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  1. #16
    Legend minimoke's Avatar
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    Quote Originally Posted by trackers View Post
    Hi Minimoke,

    The guy I share an office with is at the base of Redcliffs and they're looking at a write-off. Have friends in Avonside also that have a writeoff from the first quake. They both think that since EQC covers the land under the house + within 8 sq metres + land under driveway, that EQC will have to pay them for most of their land. If that was the case they'd get 100k for land and insurance would cover house.

    A lot of uncertainty out there but its an interesting theory.

    Commiserations to everyone affected; we got through both without anything major (except water cylinder damage and a few superficial cracks) which is a massive relief having a young baby etc.
    Thats probably right. My understanding is that EQC will pay for the land under your house and around your house to 8 meteres. This means if you have, say an 150sqm house this covers around 800sqm of total land. EQC will pay for either the remediation of the land or the value of the land art the time of the earthquake. And thats where it gets interesting.

    If I look at my example above my 800sqm land had a nominal value of $133,000. So that will immediately tap out EQC at $100k leaving my insurer to pay the balance. Thats $100k is settlement for the land. Pegasus Town is selling 500sqm for around $170k. $150k will get me 800sqm at Rolleston or 550 sqm at Delmain for around $165k. No idea what you get for your money but we can see there is a shortfall in both cash and equivalent section size for a start.

    $100k isn't going to get you much land. The next problem is to look at your insurance cover. If you have "Landlord Insurance" with State, for example, you are not covered for "
    Subsidence: You’re not covered for loss or liability connected in any way with:
    1. subsidence or erosion, or
    2. settling, warping or cracking caused by earth or other movement
    so $100k is about as much as you could expect for the land.

    The next problem is, assume you but a wee parcel of land somewhere with your $100k and whatever else you stump up with, you then have to put a house onto that parcel. Your previous 150sqm house may not fit on that land so you may have to build a smaller house. You also have the risk of putting a decent house on poxy land which means you can't gt a true sense of its resale value.

    Then theres thinking about the neighborhood. I'm sure people out at pegasus town and rolleston and delmaine have these ideas that their neighborhood will be filled with like minded people. They may find their small sections are built with really cheap housing so the landlords can maximise their return. Which is fine for the landlord but may devalue the overall neighborhood - especially if the Hampshire Street residents move in. (so theres a hint why never to buy in an undeveloped neighborhood - you don't know what your neighbors are like!)

    Of course the detail lies in the Insurance Policy and how the Insurance company sees its obligations under that policy. For example you may have had a piece of land slightly recked by the September Earthquake which as at February was worth not very much. How will the insurance company value the land as at February? Will the tax payer stump up the difference?

    It will be interesting to see how this pans out over the next few years.

  2. #17
    Advanced Member trackers's Avatar
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    ^ In relation to Delmaine, the word on the street is that FBU has just bought every available section to house their national and international contractors

  3. #18
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    I wonder if it is worth thinking about "where in Christchurch is there undamaged low-cost housing available"? The reason for this is that wide swathes of such property out east have been rendered useless. Therefore, in relative terms there is a shortage of houses in the $220,000-270,000 price range. I suspect that undamaged low-cost suburbs like Hornby will experience strong demand in due course. Interested in others opinions.

  4. #19
    Advanced Member trackers's Avatar
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    I think thats an extremely good idea... Its less than the cost of replacement for so many affected places as it is now, and land prices in unaffected areas are bound to rise.

    I wonder if people in that range have put up their prices? I would assume not given that so many people have left the region + extra hoops that people are going through now before they'll sign the dotted line (structural engineers etc).

    If you bought a place now though, would someone give you insurance on it? required by banks for the mortgage...
    Last edited by trackers; 09-03-2011 at 06:52 PM.

  5. #20
    Legend minimoke's Avatar
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    Quote Originally Posted by trackers View Post
    If you bought a place now though, would someone give you insurance on it? required by banks for the mortgage...
    I don't think there is any insurance at all be written in Christchurch at the moment. The "ban" on new policies is likely to continue until the end of the month. Trouble with this quake though is that insurers are going to look more closely at their coverage and premiums with talk that some of the international re-insurers are thinking about quitting earthquake cover in NZ. Expect premiums to rise. As an aside I reckon we can also expect some bargain properties to come onto the market as residents / landlords cut their losses and run. Buyers beware! Also Real Estate agents will be joining the lines of unemployed.

  6. #21
    Legend minimoke's Avatar
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    Quote Originally Posted by trackers View Post
    ^ In relation to Delmaine, the word on the street is that FBU has just bought every available section to house their national and international contractors
    Word also on the street is that Delmaine is a shambles with developers putting in roads that are under spec and channeling with no resource consents. Sounds like a fair bit of the new stages have to be pulled up and started again.

  7. #22
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    Quote Originally Posted by Serpie View Post
    If your full replacement insurance, and your loss of rent insurance, were with the same provider, then it would be interesting to see how they would treat a delay in rebuilding. Surely if you had a policy that required your insurance company to rebuild your property, and it tooko themover a year, then you'd have a case to request that they compensate you for lost rent for this extended period?

    It's not your responsibility to obtain the resources to rebuild in a timely manner - that's down to your insurers.
    Hi Serpie i've sent you a pm.

    ron

  8. #23
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    I am looking to buy a residential property in Christchurch (Green Zone) but have been told by all insurance companies that they are not writing any new insurance in Christchurch. AMI were allowing assignments to new owners but as of last Monday have stopped that as well.
    So does this mean that there are no Real Estate transactions going through? Surely not! I would have thought there are companies out there that are prepared to take on risk at a price.

    If there is anyone in Christchurch that has any ideas as to how to work around this fiasco, I would love to hear them.

    G

  9. #24
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    Quote Originally Posted by Oiler View Post
    I am looking to buy a residential property in Christchurch (Green Zone) but have been told by all insurance companies that they are not writing any new insurance in Christchurch. AMI were allowing assignments to new owners but as of last Monday have stopped that as well.
    So does this mean that there are no Real Estate transactions going through? Surely not! I would have thought there are companies out there that are prepared to take on risk at a price.

    If there is anyone in Christchurch that has any ideas as to how to work around this fiasco, I would love to hear them.

    G
    Why on earth do you call that a fiasco? It's simply a commercial decision by insurers. You can always carry your own insurance, but you may have difficulty finding a source of finance.

  10. #25
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    Oiler I will give you all the insurance you want the premium is 100%
    Possum The Cat

  11. #26
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    Quote Originally Posted by POSSUM THE CAT View Post
    Oiler I will give you all the insurance you want the premium is 100%
    LOL thanks for that idea Possum. Why dont i just pay cash, dohhh

  12. #27
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    Quote Originally Posted by Serpie View Post
    If your full replacement insurance, and your loss of rent insurance, were with the same provider, then it would be interesting to see how they would treat a delay in rebuilding. Surely if you had a policy that required your insurance company to rebuild your property, and it took them over a year, then you'd have a case to request that they compensate you for lost rent for this extended period?
    I had the same issue but in the insurer's eyes they had done everything required of them in that timeframe. My rental cover was for 8 months and in that time they completed an evaluation (albeit with my "encouragement") and have offered me a payout on their share of the expenses (driveways, paths etc.)
    My real problem is with EQC. I have two claims both under cap so they are going to repair rather than pay out. I do not want a repair done as my neighbours wish to buy my land. I'm losing money paying for an uninhabitable house while I wait for EQC to organise repairs which could be a couple of years away. If they just paid me out I could then afford to sell the land as is, and walk away. In it's current state the bank won't let me sell as I would be making a significant loss.
    Does anyone know anyone at EQC who I can talk to. So far I've got nowhere and am still awaiting reply from a complaint I lodged weeks ago.

  13. #28
    Guru peat's Avatar
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    i am only qualified to talk about Loss of Rents insurance. My understanding is that the indemnity period (time frame for rental cover) is totally fixed and is almost never extended, no matter what. The argument is that you chose the time frame, thats what you paid for, thats what you get. But as I only deal with commercial I have no comments regarding EQC sorry.
    For clarity, nothing I say is advice....

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