Earthquake-damaged homes written off by insurance companies in Christchurch are becoming hot property for investors wanting to make money in the rental market.
While they may help to fill demand for rental housing in the short term, there are concerns about what will happen to these uninsurable homes in the future and the standard of rental properties in the city is set to drop.
Some owners of quake-damaged homes whose insurance companies are paying out for a rebuild, rather than a repair, are taking the money and selling the property for the land value.
Tim Baker, a real estate agent in the east of Christchurch, says one investor recently bought two uninsurable damaged properties and is now making good money renting them out.
Mr Baker, a local community board member, says as long as the properties cannot be insured, owners are unlikely to invest any money maintaining or improving them.
Real Estate Institute director Tony McPherson says it is hard to say what the long-term effect of uninsurable properties will be, but in the short-term the houses are helping fill a gap in the rental property market.
