I have just received up-to-date information of the insurance status of houses to be rebuilt or repaired in Christchurch.
According to the Insurance Council of New Zealand there are 24,660 over-cap (damage in excess of $100,000) houses subject to a repair or a rebuild in the Insurance companies portfolios. We think that number is light, but even if that is the number, what is startling is the high number of cash settlements the Insurance Industry statethey have settled or anticipated to be settled.
According to their figures there are currently 10,000 properties where cash settlements have been concluded and a further 2,600 where a cash settlement is probable. Now, that is a total of 12,600 over cap properties where the control of the rebuild has been transferred from the Insurance Company to the policy holder.
That means a lot activity in the future will be in the hands of individuals, which we as a community need to be prepared for. I think this realistically means an avalanche of cash flowing into our community in the first two quarters of 2014 as repairs and rebuilds of housing stock gather momentum.
In analysing the Insurance council’s figures and including EQC liabilities and payouts made, it looks like we can all agree that the total damage to housing stock won’t be far away from the rule of thumb estimate of 60% of the total damage. If that total is $40 billion then we are looking at around $24 billion for all housing damage. That is an enormous amount of cash, most of which is destined to flow back into greater Christchurch.