Law change hits apartment sales

Thousands of Auckland heritage apartments with high earthquake-risk face devaluations after government law change proposals, says a real estate boss.

Martin Dunn of City Sales is worried about the change, saying some apartment sellers are already suffering.

"People are paying less for these apartments, depending on what type of rating they have. It's ridiculous," he said, labelling the Building (Earthquake-prone Buildings) Amendment Bill as "overkill".

"This is going to impoverish people," he said.

Pauline Bridgeman, the agency's sales manager, said she had noticed many heritage properties up for sale.

Engineering work to upgrade the buildings could be difficult and expensive, she said.

Heritage building owners must have their properties assessed within five years and upgrade or demolish in the following decade, although buildings with the highest heritage rating have more time to comply. Pre-1976 multi-unit heritage apartments could cost millions to upgrade.

Quantity surveyor Peter Bamford, a director of building consultants and asset managers CoveKinloch, said strengthening costs depended on a building's size, age, complexity and location.

"Each apartment could cost $50,000 to $100,000 to strengthen but it very much depends. Some of them would cost more than they'd be worth. Investors are very reluctant to buy these and banks are wary," he said.

But Judi Yurak of Ray White has just marketed a two-bedroom heritage apartment on Wellesley St that fetched $634,000.

"The vendors were very happy and the purchasers were very happy," she said.

Only five or six people cited earth-quake issues, she said.

The Government is already softening the law change which makes it mandatory for earthquake-prone buildings to be assessed and strengthened or demolished. Building and Construction Minister Nick Smith says farm buildings will now be exempted from the bill.

He has also revealed plans to relax assessments on other types of buildings.

Dr Smith declined to say if changes were planned to churches and country halls but Mr Bamford said it appeared unlikely apartment blocks would be exempted from the new law.

Employers and Manufacturers Association chief Kim Campbell welcomed exemptions and wants more.

"The seismic upgrade has been calculated to cost $3 billion in Auckland alone but take 4000 years to save just one life."

New earthquake law proposal
• Law change requiring buildings to be assessed in 5 years
• Buildings assessed as less than 34% of Building Code must be upgraded
&bull: Building owners will have 10 years to comply: demolish or strengthen
Further 10-year extension available for owners of heritage building
Multi-storey apartment blocks with 2+ units are included