The Canterbury Earthquakes

What I want to talk about today is how the earthquakes have impacted on the real estate industry. This includes how the market has been affected, what challenges we are facing, and how we are overcoming the ones that we can. 

September 4 2010 – a day which Cantabrians and New Zealanders alike will never forget. A day etched in our history forever, a day which some would rather forget, and many wished never had happened. At 4:35am we were bullied from our peaceful slumber by a noise like you have never ever heard, shaking like you could never possibly imagine feeling, and it went on and on and on for approximately 40 seconds. 40 seconds of pure terror, of thinking that your life was about to end and yet miraculously no one was killed as a result of that massive 7.1 magnitude earthquake.

February 22nd 2011 and again we shook violently, but although this was only a 6.3 magnitude quake it was to be a whole lot worse. It was shallow, it was close and it was deadly – claiming 181 lives – certainly a black day in our history and perhaps one of our blackest.

June 13 – a double whammy!! A 5.7 and then shortly afterwards another massive 6.3. Fortunately no lives lost in either of these two. 

So let’s have a look at some stats about the earthquakes which many of you may already know, but some will probably find hard to believe.

Up to September 4th 2010 we had 23 earthquakes in Canterbury (For the 2010 year), the maximum magnitude was 3.5. 

From Sept 4 – Dec 31 2010 there were 3854.

From Jan 1 – July 15 there have been 3854 also.

There has been 1 magnitude 7

2 over magnitude 6

25 over magnitude 5

257 over magnitude 4

2002 over magnitude 3

5127 over magnitude 2

156 over magnitude 1

Anything from magnitude 4 or above you will generally always feel

Magnitude 3 and above will be mostly felt

Magnitude 2 + – sorry Aucklanders, i know you guys had a mag 2.9 but quakes at that level are just rumbles to us and we don’t always feel them

Magnitude 1 -2 don’t usually hear or feel.

 So of the ones that we would most likely have felt there have been 2367 over 314 days which = 7.53 per day or approximately 1 every 3 hours and 10 minutes

Total 7708 over 314 days = 24.55 per day or approximately 1 every 59 minutes.

So what has been the impact on the real estate market so far?

Total sales pre-quake for the year of 2009 were 11,341

In 2010 8,526 and year to May 2011 2,895.

It seems every time sales numbers begin to rise again, whammo we are hit with another large event that sets us right back on our heels again. Let’s hope that trend stops – NOW! 

2010 sales were 25% down on the previous years and 2011 to May sales are 37% down on 2009 figures and 27% on 2010’s at the same point.

So you can see there has been a definite impact on the number of sales in our market place.

So how has our local market place been impacted?

We are fortunate enough to be working in an area that has not suffered as much as other parts of the city and as such we envisage demand will be strong for properties in the area we operate. However demand and supply will be influenced in part by government payouts, people’s general indecision, and their ability to obtain insurance and finance. 

If demand in these unaffected areas lifts significantly enough then obviously there will be a flow on effect to prices and this could be a double edged sword for some purchasers who will be limited in funds to a degree by their payout amounts.

You can see by the figures that initially there is a slowing down after a significant event and then 4-6 weeks later things start to pick up again. Plus let us not forget that all the same things that motivate people to shift still apply so there will be a business to be won regardless of how tough the market gets, it’s just the parameters in which that market then operates as a result of the quake that will possibly change 

What are the challenges we face operating in an earthquake ravaged city.

 Let me assure you – they are many – Let me run through just a few

Diminishing population as people flee

Damaged buildings and no go zones

Displaced residents/businesses

Traffic flows and directions have changed. This is because many businesses including a good majority of the city’s solicitors operated out of the CBD. Now they are dispersed all around the city as have a lot of other business that were previously based in the city. This had a significant impact on our roads and traffic flow especially when you consider the damage to our roads and the amount of road works etc going on in the city at present. 

Damaged infrastructure roads/sewer/power & water


Uncertainty over areas, streets and houses that will be red zoned

Uncertainty over what owners will receive for properties in the red zones and payout time frames because even though the government has now released its payout options, due to the earthquakes on Feb 22 and June 13th many areas remain in the orange and white zones which are still being assessed. It would be fair to say that a good majority of properties in these areas will end up being in the red zone. So there is still a large degree of uncertainty hanging over people and their property and as such they are unable to move on.

 So what challenges are we facing in real estate in Canterbury?

 Well I have listed down here just a few of the ones I can think of and that we have come up against so far.

Large Rent roll – what to do and how to handle it.

Communication issues immediately afterwards


        Instant stand down for 21 days

        No insurance policies issued in this time

        Insurance issues examples

No insurance no finance

Another issue surrounding insurance and you have probably thought this to yourself already is that if you intend to borrow money to complete the purchase of a property and you can’t get insurance – you also won’t get finance.

Check on status of all clients and properties for sale, under offer and confirmed.

Banks/Insurance companies & purchasers wanting engineering/builders or geo-technical reports &   often after each large shake

Purchasers wanting to re-inspect properties after each large shake

How to handle EQC/Insurance claims between vendor and purchaser 

So how are we rising to and overcoming these challenges? Lot’s of alcohol and re-runs of


Immediately after the February quake communication with solicitors was severed. It became imperative to quickly ascertain e-mail addresses for these solicitors and over the next 2-3 weeks establish where their new premises were and what their phone numbers were.


This is probably the biggest challenge we face on a daily basis other than the ongoing quakes of course. The Canterbury earthquakes are New Zealand’s biggest ever insurance events and the impact not just on us as Cantabrians but you as New Zealanders will be felt for some years to come as premiums rise to recoup the significant costs that are being incurred at present.

After a large event there is an instant 21 day stand down period where no house/ house/contents insurance policies are issued.

After that 21 day period, insurance is still very hard to come by. In fact one of the only ways we are getting around that issue at present is for the purchaser to take on the vendor’s existing insurance policy.

And hopefully the vendor is insured for full replacement cover as I have a client I have just sold a house for that purchased in another district and when they went to enquire about the vendor’s insurance policy it was discovered that the vendor (who thought they had comprehensive cover) only had cover for about 2/3rds of the replacement value of the house. If my clients went ahead and purchased they would be under-insured and that is a big risk to take.

I have another client with a slightly different insurance headache. They bought a section and had a builder lined up to use and in actual fact building has now commenced and the foundations have been laid. However building has to stop now as the builders cannot get insurance.

It is important to realise that when buying a property it is your responsibility to ensure you can get insurance or are able to take over the vendor’s policy. For properties going to the market we are asking the vendor to contact their insurer to establish whether it is likely or not that they would transfer the policy to the new purchaser.

Insurance issues will continue to arise especially as long as we are getting large quakes in Canterbury and even then insurance companies may be particular about what areas they will insure in or won’t insure in once all the land reports and geological surveys have been completed and made available.

Listing properties for sale.

Operating in the environment that we are dictates that properties must be well priced and owners must be familiar with the state of their property in respect of its insurance and condition. Hand in hand with this is establishing a suitable marketing campaign that exposes the property to market in the right way and at the right times. This includes selecting the right profile marketing and selecting the right marketing method and the right time to do open homes.

Properties going under contract.

When we go to sign up an offer on a property now, there are a few more precautions and steps we need   to take in order to protect ourselves and our clients/customers.

We have to insure that all defects with the property are revealed which under the act we do anyway. However we are now operating in an environment where the seller may not know about damage that exists to the house because as a result of the earthquakes some damage may not be to be seen with the naked eye and may not actually become apparent for some time after the actual event.

So for every offer we do we insert a builders/engineers report clause into the agreement. If the purchaser does not want one it is more than likely the bank or insurance company will as a condition of finance or insurance.  

As I have mentioned already regarding the difficulty surrounding obtaining insurance, we insert a finance and insurance clause and make it very clear to the purchaser that they must have their insurance in place prior to allowing their solicitor to make the agreement unconditional.

Heaven forbid the purchaser’s get an offer of insurance and the solicitor confirms the agreement and there is another big quake and the insurance company withdraws their offer because the purchaser hadn’t accepted it and so the insurance wasn’t “in place”. This nearly happened to one of my clients in September however he had accepted the insurance company’s offer and even paid the first premium prior to settlement so the insurance company had to honour that policy.  

Another step we have to take to protect our customer/buyer is to ensure that any EQC/insurance claims are transferred over to the new purchaser on settlement. To do this we insert a clause which effectively states that the agreement is conditional upon the solicitors determining how the EQC/insurance claims are to be handled.

Why, I hear you ask do I keep mentioning insurance and EQC claims – doesn’t EQC cover everything? Good question but no. They cover the inside and outside of building or dwelling up to $100,000 + GST but not paths or driveways, fences, gates, letterboxes, clotheslines etc So in a lot of cases the vendor has more than one EQC claim lodged, and often a separate insurance claim so all of these must be transferred. 

There are no doubt other challenges we face that I may have omitted to mention today but hopefully I have highlighted enough of them to give you some understanding of our current market and the obstacles we face daily. May you never complain about having a tough market place again until you have walked a mile in the shoes of someone in a disaster stricken area, because only then will you realise what a tough market truly is.

To summarise, living in Canterbury at present is certainly challenging. Having experienced terror that you often only see in movies or on tv brings a certain reality to how severe mother nature can be and how quickly your seemingly normal every day life can be so abruptly and dramatically changed forever. Most of us know of at least one person that perished on February 22nd which makes it even more tragic. A flood, tornado, fire, or even tsunami can all be devastatingly deadly and recent worldwide events certainly have shown us that, but earthquakes are a whole other world. Sure the big one comes and is gone just as quick, and sure other natural disasters can be equally devastating, but at least they usually stop and you can begin to relax, rebuild and heal. With earthquakes, it’s the continual bombardment of aftershocks, it’s the not knowing when or if the next big one is coming. It’s the trying to comfort your children and rationalise it to them, it’s the worry about what lies ahead for a ravaged city, it’s the instant flashbacks every time another good shake hits, it’s the challenges it brings to every day of your “now changed forever” life.

But we will stand strong, we will survive and we will rebuild the Garden City and it will be better, greener, and more modern, it will be safer, it’s people resilient, resolute in the massive task ahead.

It’s little steps each day that will make the difference and at Kennard Real Estate we are doing our bit to overcome life’s everyday challenges. Thanks to management with incredible vision astute business acumen and unwavering care for the welfare of staff and their families we too will rise to the challenge that lies ahead.

I would like to give my thanks to all the members of the group who have sent messages of support, donated money to the rebuild of Canterbury, who have held events and raised funds for the rebuild effort, and who have followed the events of the last 9 months with amazement, horror, and sadness we thank you from the bottom of our hearts, it is overwhelming to know that the rest of New Zealand is behind us like they have been and continue to be, in fact it is truly humbling so once again thank you.

Thank you for the opportunity to tell you a little bit about life in Canterbury following the earthquakes, I hope you have found it of interest and of value. If you have any questions, please feel free to e-mail me at 

Stay safe & take care.


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