Shakes rattle property industry

Legal firm Minter Ellison Rudd Watts surveyed the sector and has reported its findings.

“There has been a great period of change recently in the sector,” it said. “The Christchurch earthquake and ongoing rebuild, rapid growth in Auckland, major projects proposed around the country – as well as ongoing legal reform. Our survey responses show that there are some serious areas of concern to New Zealand property organisations.”

The survey found 70% of respondents welcomed foreign direct investment in New Zealand property.

“This will come as no surprise to many. Notwithstanding political and public concerns that foreigners are ‘taking control’ of our farmland and prime real estate, the reality is that we are a small country that needs foreign capital in order to develop our economy. We need to be seen as an attractive place to invest.”

The cost of insurance cover was also an area of increasing concern, as was the problem of earthquake-prone buildings.

“In the wake of the Canterbury earthquakes, lawyers, landlords and tenants are carefully examining lease clauses (possibly for the first time) to determine who is responsible for strengthening earthquake-prone buildings. To what extent can the costs of such work be apportioned, if at all? And if something does go wrong and someone gets hurt, who is liable?”

Earthquake strengthening requirements were also a key concern.

The report said a potential change of government was also causing uncertainty for the property industry. “Depending on what government gets into parliament, it could mean more change to come with minimum requirements for seismic strengthening and building standards.”