Red-zone payouts to boost building work

Posted 18 Aug 2011 by MediaStuff Popular
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Sluggish house-building in Christchurch is expected to pick up before Christmas as developers target displaced property owners.

The Christchurch City Council issued 78 residential building consents and 61 commercial consents in June and July. That compares with 210 residential and 39 commercial consents issued in June and July last year.

House alterations over that period were down on last year, from 139 to 73.

In May, the Government changed the building code to improve the seismic strength of all buildings.

City council environmental policy and approvals manager Steve McCarthy said the drop in consents for new houses was a reflection of last year's buoyant residential housing market in Christchurch.

"It's taking people a wee while to gear up to get new houses under way, but we would expect to see a rapid escalation in the number of consents from September. We would expect them to really start new builds in November."

McCarthy said companies that offer generic designs and land-and-house packages had three times more people signed up for new houses in July in areas like Halswell, Yaldhurst, Belfast and Wigram.

"Obviously that would have been kick-started by the Government announcement in June that they were going to buy up [residential red zone] houses," McCarthy said.

The surge in commercial building work came as businesses and property owners either rebuilt or relocated after the earthquake.

Ngai Tahu Property's general manager of development, Russell Pyne, said increased interest in the first three stages of its Wigram Skies development in the past two months had yet to transform into contracts.

"Consents numbers will certainly increase between now and Christmas and, I would think, quite markedly."

Insurance issues were still a hurdle, he said, with some builders unable to get risk or builders' insurance, and some property owners struggling to get cover for new houses.

More than half the 139 sections now available at Wigram Skies had sold and he hoped another 400 would be released in the next six months, he said.

Westpac's chief economist, Dominick Stephens, said last week the slow pace of insurance paperwork and worries over further aftershocks were slowing residential construction in Christchurch.

However, Canterbury house sales rose in July, compared with June, and a shortage of houses and increasing demand pushed up prices.

McCarthy said fewer residential alterations, such as adding rooms and garages, was a symptom of a flat economy.

Also, the Government relaxed restrictions in December on work that needed consent.

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