Understanding the impact of natural hazards
When you’ve found the property you want to buy, it’s important to find out as much as possible about potential hazards before you make an offer.
Summary of important things to know
Before you buy, find out if any natural disasters are relevant to the property and how you may be able to reduce the risk of damage.
If you’re interested in a property in an area impacted by earthquakes, you should get it inspected by an appropriately qualified professional.
If the property has been the subject of an EQC claim, check the EQC scope of work to see what was done and seek legal advice before you sign a sale and purchase agreement.
This information on natural hazards may not cover everything that is relevant to you or the property. You should always get advice from your own lawyer or conveyancer and other registered professionals.
New Zealand is at risk of many types of natural disaster. Before you buy a property, find out if natural disasters could impact the property and how you may be able to reduce the risk of damage to buildings and land.
Hazards to consider include:
- volcanic eruptions
- hydrothermal activity such as hydrothermal eruptions, ground subsidence and gas emissions.
The local council should have information on any hazards for the property you are considering. Some of this information may be available free of charge, or you could order a land information memorandum (LIM) report. Read more about LIMs here.
Visit the Earthquake Commission (EQC)(external link) for more information on what to look out for.
Buying after an earthquake
Even small earthquakes can damage a home depending on its design, construction and the land it sits on. Pay particular attention to chimneys, foundations and retaining walls, noting their construction and quality. Land can also become less stable.
These features can make some homes susceptible to earthquake damage:
Houses on slopes with large open internal spaces.
Pole houses on slopes with limited foundation bracing.
Houses with more than one type of foundation, for example, concrete slab foundations as well as timber piles.
Houses with irregular design shapes or several split levels.
Double skin brickwork and unreinforced concrete block walls.
If you’re interested in a property in an area impacted by earthquakes, you should get it inspected by an appropriately qualified professional. We recommend using an independent property inspector or structural engineer who can assess and identify any issues.
A building inspector will assess the home, or particular features of the home, and prepare a report for you. Make sure you know what they will include in their inspection and ask for a sample report so you know what to expect. Check that they’ll consider how chimneys, foundations and retaining walls might perform or be affected by a natural disaster.
Read more about property inspectors here.
If a property is in an area with known geotechnical problems, you may want to consider adding a Geotech report to your due diligence. Properties with steep slopes, known liquefaction issues, and those sitting on a cliff may be more prone to foundation and ground stability issues.
Living by the sea is a dream for many Kiwis, but if you’re interested in a coastal or seaside cliff-top property, it’s important to understand the long-term risks and potential issues from rising sea levels and coastal erosion.
Government agencies have released information on the risks and impacts global warming and climate change will have on New Zealand coastal properties. The Ministry for the Environment(external link) states that rising sea levels will increase the risk of erosion, inundation and saltwater intrusion. And the Parliamentary Commissioner for the Environment has released a report which highlights the different effects global warming is having on our country.
Read ‘The state of New Zealand’s environment’ report here(external link).
If you’re interested in purchasing a coastal property, it’s a good idea to get it checked by an accredited property inspector who can identify defects, future or urgent maintenance issues and any problems resulting from a coastal location.
Below are some things to consider when looking to purchase a coastal property.
Rising sea levels
According to the environment report above, the sea level is likely to rise by between 50 centimetres and 1.0 metre by the end of the century. A report commissioned by the Deep South National Science Challenge(external link) states that nearly 44,000 homes in New Zealand are less than 1.5 metres above the current average high tide mark.
If you’re looking for a property near the sea, it’s a good idea to ask what if any precautions have been made to the property to protect against the threat of rising water levels.
Flood zones and storm impacts
The frequency and severity of storms and cyclones bringing heavy rainfall, damaging winds, waves and storm surge to New Zealand has increased.
Coastal flooding typically occurs when a major storm, king tide, or tsunami causes the sea to surge inland. Flooding is usually caused by:
- heavy or excessive rainfall
- landslides — triggered by heavy rainfall or earthquakes
- rapid ice melt in the mountains
- a ruptured dam or levee
- high sea levels at river mouths.
The property title and LIM report may include a history of flooding as well as potential flooding hazards. Some councils may provide flood maps which show the area's risk of flooding.
If you’re considering living in a coastal area, find out about road access during storm conditions and consider the cost of vehicle maintenance if the road is often inundated by salt water.
Coastal erosion is a natural process which happens when wind, waves and water currents wear away the shoreline.
Properties located on low-lying sand or cliff
For more information on coastal erosion visit Te Ara(external link) - The encyclopaedia of New Zealand.
Can you get insurance on the property?
If you’re looking at buying a coastal or clifftop property, you’ll need to find out if the property can be insured and at what cost.
As the risk of environmental damage increases along coastlines, insurance companies are reassessing how they cover this type of damage. Be aware that the cost of premiums may increase, exclusions may be added, or insurance cover may be withdrawn for some properties
The Earthquake Commission (EQC) doesn’t cover damage to land from coastal erosion (although it does cover storm and flood damage to land) and it doesn’t cover damage to residential structures or contents from storms, floods or coastal erosion.
Seek legal advice and clarification from an insurance provider before signing a sale and purchase agreement.
Maintenance and upkeep of coastal property
Property maintenance costs may be higher for coastal properties because salt water can damage building materials and exposed electrical components. There may also be additional upkeep, for example, cleaning salt from windows and removing debris.
If the property has had an EQC claim
Ask the agent whether the home has been subject to an EQC claim. If it has, ask for more information about the claim including whether it has been resolved, and seek legal advice before you sign a sale and purchase agreement.
Get a copy of the original EQC scope of works. You can then check to see whether that repair has been completed. Check local council files on the property to ensure any building or construction work has appropriate consents, and ask your lawyer or conveyancer to review these too.
Ask the vendor or agent which company currently insures the home and if claims have been made as a result of damage from a natural disaster.
If you’re thinking of purchasing a home listed ‘as is, where is’, it may have:
- suffered substantial damage and has been written off by the insurers
- been approved for repair, but no repairs have been carried out, or
- not had insurance at the time of the natural disaster.
It’s a good idea to confirm that you can insure the house well before settlement because your lawyer and lender may require that you have evidence of insurance cover before the settlement date.
Seek legal advice and clarification from the insurance provider before signing a sale and purchase agreement.
If a property with an EQC claim is being sold and the parties have agreed they want EQC to settle any outstanding claims with the buyer, the seller will need to complete a deed of assignment to advise EQC of the assignment of the claim to the new owner.
Local council information
If you’re searching for a home in an area that has been affected by natural events you may need to collect additional information specific to the area. Councils will provide you with more detailed information about the natural events that can occur in the area.
Some councils provide geological hazard maps which allow you to search the area's flooding, faults, liquefaction, and geothermal risks.
In Canterbury, you can look up a property’s land zone, technical category, regional information and data on the Canterbury Maps(external link) website. The Christchurch City Council also provides information about the technical categories and land zone on their website My Land Zone(external link).
Councils located in coastal areas may provide information about the area’s costal erosion, landslips, rainfall amounts, and general coastal hazards including the effects of climate change.