Owners of 'frozen assets' need help
SHANE COWLISHAW | The Press | 23/10/2010

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The Government should become a "buyer of last resort" to help people with earthquake-damaged properties who want to move, a Christchurch financial adviser [sic] says.

Liontamer Investments co-managing director Janine Starks said people badly affected by the Canterbury quake would have a "frozen asset" for at least the two years it would take to remediate their land and rebuild.

They would be unable to access the money tied up in their house as the property could not be sold until it was repaired or rebuilt.

Earthquake Recovery Minister Gerry Brownlee said this week that house prices were likely to rise above their original value because land in the hardest-hit areas would be improved.

Starks agreed, but said it could be years after houses were rebuilt before that happened.

While the land would be "stronger", the market was likely to remain fragile, with buyers cautious to invest in quake-hit areas, she said.

"If it takes two years to fix it, you've got a length of time when negative sentiment hangs over it. Who wants to be the first person buying a house in that area?"

She said the elderly would be among the worst affected. Some could be forced to move into a rest home and pay for it with payouts from their damaged property.

Starks said that in the worst cases, the Government could buy the land immediately and pay out the owner.

She said Brownlee had stated that he believed property prices would rise, so he should be confident in the Government investing in the land.

"That's quite a risk to take with taxpayer money, but as a taxpayer I almost wish they would," she said. "I feel so sorry for the people that I wouldn't mind some of my money being used."

Brownlee said yesterday that the Government had considered buying the land from homeowners, but it was not an option at present.

The Earthquake Commission was obliged to return the land to its original state, he said, but the Government would spend extra money in the worst-hit areas to improve it.
International experience showed land values would rise reasonably quickly after the work was completed, he said.

The Government was already spending a large amount of money in Canterbury, he said, and councils did not have the money to buy the land.

Christchurch Mayor Bob Parker said he understood that many people wanted to move on immediately.
He was unsure what could be done, but the city council would talk to the Real Estate Institute and Brownlee to see if "options" could be created for people.

Parker said his first house in Woolston was flooded years ago and he was unable to sell it, so he understood how people were feeling.

"Not being able to sell that house was an economic disaster for me and my young family," he said.