Market outruns rising sea
Home buyers aren’t shying away from the Lower Hutt suburb of Petone, despite predictions it could be under water in 80 years and homes there could be uninsurable in 30 years.
In November, Stuff reported on a Hutt City Council-commissioned study that estimated the sea would rise by at least 1 metre over the next 80 to 100 years – some estimates have it rising as much as 3.5m – leaving large swaths of the low-lying seaside area under water.
But sales figures from the Real Estate Institute of New Zealand show 21 houses sold in Petone between November 2018 and January 2019.
Twenty-three houses sold during the corresponding period a year earlier. The year before that, 53 homes were sold.
Another 11 homes sold in Petone in February. The median sale price for that month was 27.4 per cent higher than the corresponding time three years ago.
Real estate agent Shane Brockelbank said he had sold about 100 houses in Petone over the past year.
The threat of climate change did not appear to have put people off but insurance was harder to come by and banks were not providing finance unless the buyer had insurance, which usually meant the vendor had to transfer the existing policy to the buyer.
Insurance Australia Group (IAG), which owns State, NZI and AMI, said recently it would be taking a ‘‘conservative approach’’ to new business in the Wellington region due to the high earthquake risk. Spokesperson Kevin Hughes said the company still planned to grow its customer base but not in high-risk areas.
Petone-based real estate agent Rupert Kemeys said the council’s climate change report had little impact on buyers.
‘‘The majority of buyers are still very positive about Petone.’’
Kemeys recently purchased an investment property in Petone and believes the suburb remains attractive.
Real estate agent Scott Ledger put two adjacent properties on the Petone Esplanade, both with sweeping views of Wellington Harbour, on the market in 2018 for $1.14m, targeting developers.
One section has sold but the second remains for sale.
Although a ‘‘few’’ buyers had been put off by concerns about insurance, buyers still want to live in Petone, Ledger said.
But insurance was an issue, and the recent announcement by IAG could have ‘‘massive implications’’ for the housing market in Petone and the rest of the region, he said. ‘‘It just means that as real estate agents we have to work a lot harder to get our ducks in order.’’
In most cases that means getting the existing insurance policy transferred to the new owner.
Insurance Council chief executive Tim Grafton said the industry was going through a period of readjustment after the magnitude 7.8 Kaiko¯ura earthquake in November 2016, which was felt strongly in Wellington.
Insurers were also increasingly aware of the risks of climate change and would be looking for councils, home-owners and government agencies to reduce it.
‘‘The majority of buyers are still very positive about Petone.’’ Real estate agent Rupert Kemeys
INSURANCE BLUES
Lucy Possenniskie was aware of issues around sea level rise and earthquakes, but they weren’t enough to put her off buying in Petone. ‘‘I just love Petone. It is nice and central and we have a dog that we can walk on the beach and there are all the cafes.’’
She purchased a property in late January with sister Clare and partner Ian Shaw.
Her existing insurance company, State, and the vendors’ insurer both turned them down.
The agent who sold the house, Kristin Davis, had been upfront about the insurance issues.
Possenniskie understood the cost of insurance could become increasingly expensive.