We'll buy your house - Govt's offer

Photo / Sarah Ivey

Insured Christchurch residents in areas worst affected by earthquakes will be able to sell their properties at 2007 values and sign over their insurance policies to the Government.

That will enable them to cash up and get out quickly, leaving the Government to recoup the payout on the property from insurers.

The scheme will be unveiled today and will be voluntary - people will be able to negotiate with their insurance companies if they wish - and the price the Government will pay will be based on the 2007 official valuation.

Those who will benefit the most from the Government offer may be people living in quake-affected areas but whose homes are not badly damaged.

They may be eligible for only a small insurance payment, but will be able to sell to the Government at pre-earthquake values.

Among the worst-affected areas are Bexley, Avonside, Avondale, Dallington and Horseshoe Lake - about 5000 properties.

People in Lyttelton and other Port Hills areas will have to wait a little longer for their options plan because the effects of the June 13 aftershocks on them have not been assessed.

Homeowners without insurance are not covered by the buy-out plan.

Prime Minister John Key and Earthquake Recovery Minister Gerry Brownlee will outline the scheme today in Christchurch, which was hit by big earthquakes last September, in February and this month.

Mr Key said yesterday that a lot of Christchurch people did not feel in control of their lives.

"We want to put some more control back in for those home-owners."

It is unlikely the Government will deem any area so badly damaged it must be abandoned.

Mr Brownlee said yesterday that no area was too damaged to be fixed.

"All land can be repaired," he said. "There is an issue then about how easily that is achieved, the time it will take and what will be the disruptive factors for communities."

He said every home-owner should be able to find out today the land status of his or her property.

Mr Brownlee told a parliamentary select committee yesterday that residential Christchurch was the Government's priority and he did not expect rebuilding in the central business district to begin for a year.

Government offers to buy properties won't be made for a couple of months, and owners will have nine months to respond.

The cost to the taxpayer is unknown - it will depend on the terms of each individual policy and how much is recovered from insurers - but early estimates suggest it could be between $200 million and $500 million.

The cash will come from the $5.5 billion budgeted in May for earthquake recovery over and above the $3.3 billion allocated for Earthquake Commission and Accident Compensation Corporation payments.