The Government has just announced some major changes to New Zealand’s earthquake-prone building system. If you own commercial property, this is news worth paying attention to.
Until now, the rules have been rigid. An existing building’s seismic performance has been measured against the standard of a new build, expressed as a percentage. If the score came in under 34% of the New Building Standard, the building was officially deemed earthquake-prone and had to be either strengthened or demolished within a set timeframe.
That system has often meant significant costs, uncertainty, and in some cases, properties sitting empty because upgrading just wasn’t viable.
That’s now about to change.
What are the Changes?
- No more blanket rules. Instead of every building being judged by the same rigid percentage, the focus will now be on the highest-risk buildings.
- Location matters. In low-risk areas like Auckland and Northland, earthquake-prone status is being removed entirely. Owners won’t need to worry about getting caught up in red tape where the seismic risk is minimal.
- Smarter, not harder. The reforms are about tackling risk proportionately. Instead of requiring a long list of upgrades all at once, with additional requirements i.e. fire safety upgrades, disability access etc along with the seismic upgrades, owners can now focus on what’s most critical.
Why it matters for landlords?
This is a real win for property owners who’ve been staring down eye-watering strengthening costs. Under the new approach, only around 80 buildings nationwide are expected to need full seismic retrofits. That means a lot of landlords will see reduced compliance costs and more clarity about what’s actually required. For investors, it also lowers the barrier to entry on older stock that may have previously been written off as “too hard basket.”
Our take
We welcome these changes, as they recognise that not every building, or every location, carries the same level of risk. By moving away from rigid percentage thresholds, the system becomes fairer, more practical, and ultimately more cost-effective for owners.
At this point, the announcement outlines proposals only, along with an intention to introduce an amendment Bill to Parliament in due course. These proposals will go through the full legislative process and may be altered before they come into effect.
