Houses Earmarked for Demolition are being Rented to Desperate Tenants

November 28, 2013

How many structurally unsound and therefore unsafe houses are being rented out by unscrupulous landlords? What is driving this desperate housing situation and what is being done about it?

Colin Young reported on the National programme yesterday that the issue of homes that were written off by Insurance companies being rented out was raised in a council meeting yesterday.

Colin worryingly reports that no figures on the number of homes that had been damaged, written off by the insurance company, cash settled and sold on as a ‘as is where is’ basis to prospective landlord were known. He spoke to a local estate agent along with the Chief executive of Insurance Council Tim Grafton, youth housing officer Paul McMahon from St John of God Waipuna Youth Housing Trust and a spokesperson from CERA and Yani Johansen from the Council to find out what is going on.

In summary, Peter McCallum, a local real estate agent said there probably are properties being sold on the private market that are more suitable for demolition than habitation but could not pin point any and said that they (real estate agents) are regulated by the Real Estates Agents Authority.

The Chief Executive of the Insurance council said that there is little the insurers can do; it is down to property rights rather than moral obligation.

Youth housing Officer Paul McMahon emphasises that in the current market people on low income don’t have a choice. In some instances properties are being made healthy and liveable but still have floors that are not level, in these cases it is a public service. But if the house being rented has mould or is not water tight and warm, this means it is exploitation.

Is the demand so great that people are taking whatever is out there regardless of health and wellbeing?  Here at First Avenue we have seen an increase in the number rental properties available recently. We believe that these uninsured properties have added to the supply of rentals in the market in the last few months and by no way do they help with the perception of the value for money in a buoyant rental market.

When we take a look at our website article Quality Tenants, Not Enough Properties written in January of this year we note; “The Christchurch rebuild continues to apply pressure to the Christchurch Property Management market, we see the total number of properties available on Trademe at 616 today. What's interesting is when you factor in that 109 are only available for short term rental that drops the real total of properties available for long term tenancies at approximately 509, the lowest rental volumes in a long time.”

When you look on Trademe today there are currently over 1000 for rent in Christchurch, 292 are short term.

In terms of houses on the market that are questionable in terms of insurance and whether they are fit for living, we at First Avenue Sales have only been involved in properties that are insured and we are really focused on insurance details being disclosed, making the whole sales process transparent.

What is clear, there is a real need for policies to be bought in that set standards for rental properties. At this stage all we know is CERA is working with the Ministry of Business Innovation and Employment to address the matter. We will keep you updated.


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Filed under Christchurch Earthquake

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