Quake families may get SCF land

Earthquake Minister Gerry Brownlee. Photo / Natalie Slade

Land the Government "inherited" through its $1.7 billion South Canterbury Finance bailout may be offered to Christchurch residents forced out of their quake-damaged homes, Prime Minister John Key says.

Mr Key raised the possibility as one of a number of options being considered to alleviate the prospect that quake-hit homeowners who may already be out of pocket under the Government's buyout offer, lose out further as they are forced to pay inflated prices for new sections if they remain in short supply.

On Sunday, about 300 Christchurch residents protested over issues including the valuations upon which the Government has based its offer to buy out those in "red zones" which cannot be rebuilt on, and the reluctance of insurers to pay out the replacement value of some of those properties.

Labour leader Phil Goff yesterday said there was mounting frustration among some families, who had little choice but to accept the Government's buyout offer but looked likely to lose "a huge amount of equity" built up in their homes despite the assurances from the Government that wouldn't happen.

"They'll lose their equity when they sell and they'll pay inflated prices because of the huge demand on the new properties that they'll be competing to buy."

Mr Goff said the issue was around existing or potential shortages of building materials and skilled labour as well as land suitable for rebuilding.

"The Government needs to prepare for that and so far they haven't."

But Mr Key said his Government was tackling those issues.

"Council has assured us there is a range of sections coming available and we have the capacity under Cera (Canterbury Earthquake Recovery Act) to fast track that if we need to.

"The Government itself, by virtue of South Canterbury Finance, has inherited a lot of land, there's quite a number of subdivisions actually available there."

Mr Key said the Cabinet had some general discussions with the Christchurch City Council about "what might happen to a specific group of older New Zealanders who might find it very difficult to fund themselves if there's an increase in price".

Meanwhile, he also said the insurance issue was at least partly due to some insurance companies experiencing difficulty in securing financial backing from the giant international reinsurance companies at reasonable prices.

Earthquake Recovery Minister Gerry Brownlee is in Monte Carlo where he is speaking with reinsurers in a bid to convince them that Christchurch and New Zealand would not be overly risky to insure in future.