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Victory for business in change to earthquake rules

New, more targeted regulations for earthquake-prone buildings are a win for commercial property owners and businesses.

Monday, May 11th 2015, 12:00AM

by Miriam Bell

Building and Housing Minister Nick Smith has announced major revisions to the government’s policy on managing earthquake risk.

A more targeted regulative approach will now be applied – with a focus on buildings where location, use and type pose the greatest risk to public safety, Smith said.

The four significant changes to the policy are:

• Varying the timetable for strengthening relative to earthquake risk;
• Prioritising education and emergency buildings for strengthening;
• Reducing the number of buildings requiring assessment; and
• Introducing new measures to encourage earlier upgrades.

Smith said that the scope of buildings requiring assessment is to be reduced from an estimated 500,000 to 30,000.

But there will be a new requirement to strengthen earthquake-prone buildings when doing substantial alterations.

The policy changes mean that buildings like schools, universities and hospitals in high and medium seismic risk areas will have to be upgraded more quickly, but buildings in low risk areas like Auckland and Dunedin can be upgraded more gradually.

Smith said the new approach will reduce the estimated cost from $1360 million to $777 million while retaining the safety gains.

Property Council chief executive Connal Townsend said the government’s planned overhaul of the crippling earthquake strengthening rules was a victory for businesses and small communities. 

He said that, while public safety is essential, businesses cannot afford the extremely high costs associated with strengthening.

“The exponential costs of earthquake strengthening work can have devastating effects on smaller communities who simply cannot afford to carry out the work, leading to derelict buildings and capital flight from regions.”

Townsend said the government’s decision will make earthquake strengthening viable for New Zealanders.

“We are satisfied with the government’s announcement as we know how hard it is to balance all relevant factors such as risk, safety, and costs.”

BusinessNZ chief executive Phil O’Reilly said the government’s move from a one-size-fits-all approach to a risk-based approach is sensible.

While all commercial building owners want to ensure their buildings’ safety and stability, buildings in low risk areas should not have to bear the same expense as those at high risk, he said.

“The new proposals for earthquake strengthening requirements will almost halve overall strengthening costs while prioritising key buildings for strengthening sooner than originally proposed.”

*A Select Committee is currently considering the earthquake-prone building proposals and will report back to Parliament in July.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.75 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.29 7.32 6.65

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