On 15 August 2019 the Government announced a policy that allows owners of on-sold over-cap properties in Canterbury to apply for an ex gratia Government payment to have their homes repaired.

If you’ve bought a home in Canterbury and discovered that it is damaged over the EQC cap, you may be eligible for an ex gratia payment to cover the cost of repair.

Under the policy, you will have twelve months (no later than 14 August 2020) to register your interest for the ex gratia payment. After that time, the policy will not be available.

If you qualify you may be able to receive an ex gratia payment equal to the agreed cost of repair.

To qualify for the support package, you’ll need to meet the following criteria:

1. You have purchased a property in Canterbury after 4 September 2010 (the date of the first 7.1 magnitude Canterbury earthquake) and on or before the announcement of this support package on 15 August 2019; and
2. Before selling the property the previous owner settled a claim with EQC on an under-cap basis; and EQC cover depends on how the natural disaster damage occurred.
3. Post-sale you have discovered the property has incomplete or insufficient repairs either as a result of defective repair or through damage which had not been properly assessed; and
4. The cost of the repair, together with the amounts previously paid by EQC for the property is more than the EQC cap ($100,000 +GST); an
5. You are unable to access private insurance to cover the cost of repairs.

This is will be a welcome resolution to many homeowners but is subject to agreement with EQC as to the extent and cost of necessary repairs.

What is payable under the policy

Where the eligibility criteria are met, payment will be based on a scope of works that takes into account:

• the work required to repair the natural disaster damage in accordance with the EQC Act, and
• any other reasonable cost of that repair work.

We may have settled the original homeowner’s claim by a managed repair (where we undertook the entire repair process), cash payment (where the homeowner receives a cash payment and manages the repair themselves), or a combination of the two.

If a previous homeowner received a cash payment for some or all of the repairs, and those repairs need addressing, you will need to find out who did the work, and what warranties are in place. You can read about warranties on the Ministry of Business, Innovation and Employment’s building website

If you find that the repairs have not been carried out, you may need to find out more from the person you bought the home from, and the real estate agent you used to buy the property.

It’s important that any payment you receive is used for repairing or replacing damaged property. Any future insurance claims or cover may be affected if the payment is not used for this purpose.

If you would like to register your interest for the ex gratia payment please use this online on-sold property register of interest form.
Alternatively use our printable register of interest PDF form.

Update on the Christchurch real estate market by Hayden Broadbelt

August saw the Reserve Bank of New Zealand drop the official cash rate fifty basis points to 1%. The size of the drop was seen as a surprise by many economists, but greatly welcomed by the housing market as the banks dropped their interest rates following the RBNZ direction. The flow on effect was positive, with first home buyers making their presence felt in the housing market. Reports have shown open home numbers increasing on the back of these favourable lending rates.

Properties for sale across Christchurch continued to be tight as property owners looked towards the warmer months to showcase their properties. Days on market dropped by 6 days to 39 days from last month, demonstrating that strong buyer demand and limited stock availability has increased sales levels. August also saw a 3.3% lift in the median sale price as the trend line continued to go in the right direction. There were 536 properties sold in August, showing an expected seasonal increase.

Anticipation for the Spring rush continues to hold the housing market to ransom as vendors remained in a holding pattern in the hope of achieving above market values for their properties. Their price expectations continue to be a hurdle despite strong buyer demand. Auctions continue to be the preferred vehicle for sale as buyer v buyer will always achieve better results than buyer v vendor.

Of course property listings are the lifeblood of any real estate business and the volume of listings coming into Harcourts across the city continues to track well. Harcourts remains the preferred real estate company in Christchurch with close to every second new property to the market being listed by your city’s favourite real estate brand.

If you’re thinking about buying or selling, or are just after some friendly advice, then please don’t hesitate to get in touch or request a no-obligation appraisal by clicking  HERE – the team here at Holmwood are ready to help.