New Orleans was being rebuilt, Baen noted, but Fukushima had been abandoned. Christchurch's recovery was slow. Louisiana's recovery period after Cyclone Katrina and the flooding was taking more than a decade, Baen said. But cities struck by disasters early last century had much faster recovery periods than those hit by more recent catastrophies.
His chart showed the single fastest recovery from a natural disaster was 1906 in San Francisco where it took only nine years for the state and private sector to rebuild the city after fires and earthquakes.
London and other British cities were rebuilt in only 15 years after World War II bombing, ranking alongside Nagasaki and Hiroshima, rebuilt in exactly the same timeframe, Baen said.
Such disasters, which disrupted otherwise normal property markets, undermined the view that real estate was a safe, long-term investment, Baen told the conference.
Typhoons, tsunami, earthquakes, nuclear disasters, plagues, terrorism, wars, fires, fire storms and changes to currency and governments were some of the events he examined at the conference hosted by the Lincoln faculty of commerce. "There is generally nothing new from long-term historic perspectives, except locations. Disasters happen.
"Recent catastrophic events tend to overshadow previous examples of major events throughout history, as most people believe those societies simply successfully recovered and continue today. Not all markets or societies, however, rebuild or recover," Baen said. "In fact, there are several examples of ancient populations of advanced societies and economies that simply disappeared with their abandoned physical buildings and improvements completely intact."
Overheated house prices trigger warnings
An economic shock could bring about a massive plunge in house prices, says Shamubeel Eaqub, principal economist for the New Zealand Institute of Economic Research.
All last year he warned of the dangers of a major price adjustment, citing a 30 per cent drop in United States and British house prices as an example of a major turnaround and the disastrous fallout.
"Such an adjustment can have significant ramifications for the financial system, household wealth and economic activity. When house prices stretch too far from incomes, they may fall if there is an economic shock," the Wellington economist warned, predicting housing would be the major issue this election year.
The recession did not purge economic imbalances such as high household debt and the Reserve Bank was right to keep a close eye on the threat from this sector, he said.
By December, Auckland house prices had surged to unprecedented levels compared with historic and international experience, he found.
"There is more borrowing and the risk from a potential fall in house prices is high," he warned last month.
"The Reserve Bank is loath to raise interest rates to control the Auckland housing market, because inflation is still low and the recovery is still in its early stages. If its new tools, like the LVR limits, don't cool borrowing and house prices sufficiently, the Reserve Bank will raise interest rates quickly in 2014."
Others to warn about New Zealand house prices are the International Monetary Fund, major international credit rating agencies, Reserve Bank governor Graeme Wheeler and the Organisation for Economic Co-operation and Development.
American economist and financial expert Nouriel Roubini has picked New Zealand as having one of the world's most precarious housing markets.
BNZ chief economist Tony Alexander reckons Auckland and Christchurch house prices will continue to skyrocket as the imbalance between demand and supply continues.
"Booming net immigration will assist housing market strength," he predicts, "but fail to alleviate tremendous strains which will appear in the labour market."
