As is where is market in CHCH

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10th July 2019, 11:08 AM
addnbsct

As is where is market in CHCH

Hello everyone,

Currently waiting on a partnership resident visa to move back to CHCH next year (fingers crossed).

When we rented in CHCH were were out east Shirley/Richmond way and had an earthquake damaged home. We're looking at Trade Me and noticing that within our budget of 500k for a first-home to buy, a lot are 'as is where is', i'm sure this is related to the earthquake.

Can't seem to find any clear-cut information with what the risks/implications of buying an as is where is home. Wondering if anyone had any knowledge or guidance on this topic.

I was wondering whether any other factors could make a home 'as is where is' other than earthquake damage such as close proximity to the sea as in New Brighton.

Does as is where is just refer to the dwelling? Is the land typically safe to build on? By that logic you could by a section at land value, get resource consent for demo.. and as there is precedent set in that the land use is already residential, it should be a fairly straightforward resource consent for a new dwelling of a similar design and profile to before. Is this an option typically explored or do people just pay for the foundation lift/fix?

Thanks in advance for any information.
11th July 2019, 02:02 PM
TheNewKiwi

I maybe can't address all of your question, but I do have some insights. As is where is homes are usually homes that were damaged in the earthquakes, but remain unrepaired for whatever reason. The owner has usually taken their EQC and insurance payouts, and chosen to move on. I am sure some homes are listed that way for other repair concerns (but probably not proximity to the coast), but the prevailing cause is the earthquakes. It really just means that there is damage to the home, and the owner is selling it knowing there is damage and with no obligation to repair it. As in, if you get in and find something is worse than you thought, you have no recourse.

The problem with homes like this from the earthquakes is that the land is problematic as well. Land is zoned in technical categories, and your ease of building is somewhat based on how your property is zoned. You can read about it here: https://www.ccc.govt.nz/consents-and...ategories-map/

We had our home damaged in the quake, it was determined to be a total loss, and we took our EQC and insurance payouts. We are currently building a new home on the same property. Sadly, we have been zoned TC3, the worst category. By far, the largest expense has been our foundation, as you must have one that is approved for that zone. And they are not cheap. Or convenient. Additionally, in our area of Christchurch we have a minimum floor level height, as well as an area around your house that must be a bit elevated, in the event of flooding. All this adds to your building expenses.

CCC is not too difficult to deal with, if you can get a good consent officer. We did a PIM before our building consent, so we got all the potential problems out of the way before the consent process began.

I am not sure if some of the issues, like land zoning and floor height, are relevant if you just raise the house and repair the foundation. There may be some kind of "grandfather clause" that lets you repair to that way it was built rather than new standards.

But that's what I know about "as is where is" houses in Christchurch.
14th July 2019, 11:25 PM
addnbsct

TheNewKiwi,

Thanks so much for your insight, it's been really helpful. Particularly the information regarding the land zoning. Also interesting to see how they're concerned with raising the foundations now, clearly flood prevention is becoming a real concern in building standards too now.
17th July 2019, 09:37 PM
Super_BQ

Quote:

Originally Posted by addnbsct

Hello everyone,

Currently waiting on a partnership resident visa to move back to CHCH next year (fingers crossed).

When we rented in CHCH were were out east Shirley/Richmond way and had an earthquake damaged home. We're looking at Trade Me and noticing that within our budget of 500k for a first-home to buy, a lot are 'as is where is', i'm sure this is related to the earthquake.

Can't seem to find any clear-cut information with what the risks/implications of buying an as is where is home. Wondering if anyone had any knowledge or guidance on this topic.

I was wondering whether any other factors could make a home 'as is where is' other than earthquake damage such as close proximity to the sea as in New Brighton.

Does as is where is just refer to the dwelling? Is the land typically safe to build on? By that logic you could by a section at land value, get resource consent for demo.. and as there is precedent set in that the land use is already residential, it should be a fairly straightforward resource consent for a new dwelling of a similar design and profile to before. Is this an option typically explored or do people just pay for the foundation lift/fix?

Thanks in advance for any information.

Having just purchased a home in Chch, I can share some real issues about buying such "as is, where is" properties. The real issue comes down to being "insurable". I Can't stress enough about this requirement because the banks simply won't mortgage on such homes if they can not be insured. You will find that the banks use their own building inspectors (as the industry has proven private 3rd parties are not reliable enough and often can pass on a risky asset as being worthy when in fact they are really not). So if you go on to buy a listed house, your 1st bet should be to consult with the bank because they have the final say ON the DWELLING.

The As Is Where Is usually applies to both land and dwelling. Banks aren't usually interesting in lending without a capital asset on the land or they're very cautious on land that is TC3. That's because the cost to meet the new requirement of building renders the mortgage underwater. I know for a fact TC3 builds with lots of land remediation can cost at least 1/2 the budget of building the house. So if you budget $500K for the construction, you can easily spend $250K just on land remediation and foundation / slab works, before you get to see what is part of the house like the timber framing. But budgeting the cost is 1 thing, trying to get a building consent is entirely another ; ie where a previous owner may of failed to get a building consent, it also means the same rules will apply to the new owner of the land. You really really need to do your due diligence.

Keep in mind, any time the property changes hands, so does the insurance and this is the difficult part. Insurers in NZ require a check-list where they expect a building inspectors to fill out (they won't accept a building report by a 3rd party but specifically, want their OWN forms to be filled out) which talks in relations to EQC damage. The forms are clever in asking about the contour of the land if there are any retaining walls, close to water ways, etc so insurers get a better idea of the risk matrix. The end result is houses that are risky will get wacked with the highest premium. Houses that are modern to current code get the lower premium. You can tell I chose the latter.
15th January 2020, 11:50 AM
addnbsct

Quote:

Originally Posted by Super_BQ

Having just purchased a home in Chch, I can share some real issues about buying such "as is, where is" properties. The real issue comes down to being "insurable". I Can't stress enough about this requirement because the banks simply won't mortgage on such homes if they can not be insured. You will find that the banks use their own building inspectors (as the industry has proven private 3rd parties are not reliable enough and often can pass on a risky asset as being worthy when in fact they are really not). So if you go on to buy a listed house, your 1st bet should be to consult with the bank because they have the final say ON the DWELLING.

The As Is Where Is usually applies to both land and dwelling. Banks aren't usually interesting in lending without a capital asset on the land or they're very cautious on land that is TC3. That's because the cost to meet the new requirement of building renders the mortgage underwater. I know for a fact TC3 builds with lots of land remediation can cost at least 1/2 the budget of building the house. So if you budget $500K for the construction, you can easily spend $250K just on land remediation and foundation / slab works, before you get to see what is part of the house like the timber framing. But budgeting the cost is 1 thing, trying to get a building consent is entirely another ; ie where a previous owner may of failed to get a building consent, it also means the same rules will apply to the new owner of the land. You really really need to do your due diligence.

Keep in mind, any time the property changes hands, so does the insurance and this is the difficult part. Insurers in NZ require a check-list where they expect a building inspectors to fill out (they won't accept a building report by a 3rd party but specifically, want their OWN forms to be filled out) which talks in relations to EQC damage. The forms are clever in asking about the contour of the land if there are any retaining walls, close to water ways, etc so insurers get a better idea of the risk matrix. The end result is houses that are risky will get wacked with the highest premium. Houses that are modern to current code get the lower premium. You can tell I chose the latter.

Thanks for the excellent advice