Earthquake Strengthening: Costs and Requirements for NZ Homeowners

The Canterbury and Kaikoura earthquakes brought seismic risk into sharp focus for New Zealanders. What followed was a comprehensive overhaul of earthquake-prone building legislation, creating obligations that affect property owners across the country. If you own, or are considering buying, an older property, understanding these requirements is no longer optional.

This guide explains what earthquake-prone designation means, who it applies to, what strengthening involves, and what it might cost.

Understanding Earthquake-Prone Building Classification

Under the Building Act, a building is classified as earthquake-prone if it would likely collapse in a moderate earthquake, causing injury or death. In practice, this means buildings rated below 34% of New Building Standard (NBS). The NBS rating represents a building's seismic capacity compared to what would be required for a new building in that location today.

Councils are responsible for identifying potentially earthquake-prone buildings in their districts and issuing notices to owners. The priority areas, which face stricter timeframes, include Wellington and other high seismicity regions, plus buildings on major transport routes or emergency services routes.

Does This Apply to Your Home?

Here is the good news for most homeowners: standalone residential dwellings used only as homes are generally exempt from the earthquake-prone building provisions. This exemption covers most houses, even older ones built with materials that would otherwise be concerning.

However, the exemption does not apply in several important situations:

• Residential buildings that contain two or more household units, such as flats or apartments
• Mixed-use buildings with residential and commercial components
• Buildings that have been used, or could potentially be used, for purposes other than residential
• Properties in designated priority areas if the council determines they pose a risk

What Buildings Are Most at Risk?

Certain building types are more likely to be earthquake-prone due to their construction methods:

If you are looking at an older apartment building, particularly one built before the mid-1970s, a seismic assessment should be high on your due diligence list.

Strengthening Timeframes

Once a building receives an earthquake-prone notice, owners have set timeframes to either strengthen the building to at least 34% NBS or demolish it. These timeframes depend on the building's location and risk profile:

• Priority buildings in high seismic areas: 7.5 years total (1.5 years to provide an engineering assessment, then 6 years to complete strengthening)
• Other buildings in high seismic areas: 15 years total
• Buildings in medium seismic areas: 25 years total
• Buildings in low seismic areas: 35 years total

These timeframes may seem generous, but they create urgency in property markets. Buildings with earthquake-prone notices face financing restrictions, insurance complications, and reduced sale values long before deadlines approach.

What Does Strengthening Actually Cost?

Strengthening costs vary enormously depending on the building type, current condition, target NBS level, and complexity of the work. Providing a single figure is impossible, but here are indicative ranges:

These figures are for the building as a whole, not per unit. In a body corporate situation, your share would be calculated based on unit entitlements. A 10-unit building facing $400,000 in strengthening might see each owner contributing roughly $40,000, though exact splits depend on the ownership structure.

Impact on Property Values and Insurance

Earthquake-prone status materially affects property values. Buyers factor in strengthening costs, and banks may restrict lending on affected properties. Some lenders will not provide mortgages at all for earthquake-prone buildings, while others require larger deposits or shorter loan terms.

Insurance is equally complicated. Some insurers decline to cover earthquake-prone buildings entirely. Others offer cover but with substantial premiums, higher excesses, or reduced natural disaster coverage. If you are buying into an earthquake-prone building, investigate insurance availability before committing.

Due Diligence When Buying

If you are considering purchasing an older apartment or unit, earthquake risk should feature prominently in your due diligence:

• Check the council's earthquake-prone building register for any current notices
• Request any existing seismic assessments from the body corporate
• Ask about planned or completed strengthening work and associated levies
• Commission an independent seismic assessment if none exists
• Factor potential strengthening costs into your purchase decision
• Confirm insurance availability and terms before going unconditional

The cost of a Detailed Seismic Assessment (DSA) for a multi-unit building might be $15,000 to $40,000, but this is money well spent compared to discovering problems after purchase. For body corporate properties, check whether a DSA has been completed and what it found.

Moving Forward

Earthquake risk is a reality of living in New Zealand. For homeowners in standalone houses, the legal obligations are limited, but understanding your home's seismic performance remains worthwhile for insurance and peace of mind. For owners or prospective buyers of apartments and units, earthquake-prone building legislation creates real financial obligations that must be factored into property decisions.

If you have received an earthquake-prone notice or are concerned about your building's seismic status, engage a qualified structural engineer early. Understanding your options and costs allows you to plan appropriately rather than being caught out by deadlines or unexpected levies.