Tue, 22 Dec 2009 7:59p.m.
The Government is promising to help people repair leaky homes after a shock report revealed nearly 90,000 properties could be affected and said the estimated cost of fixing them was a staggering $11.3 billion.
Building and Construction Minister Maurice Williamson released the report today and said the damage was much greater than anyone had previously wanted to acknowledge.
"This leaves thousands of New Zealanders in a terrible position," he said.
"They may not be able to borrow the money to repair their homes, or to sell them, so their single most important asset is decaying in front of their eyes."
The previous government struggled with the problem, and Mr Williamson said the blame game had been played for too long.
"Now it's time to act. That's why the government is bringing together a package as a priority to help affected homeowners repair their homes and move on."
Mr Williamson commissioned the PricewaterhouseCoopers report, which estimates that between 22,000 and 89,000 homes could be affected.
Only about 3500 had been repaired to date and about 9000 were now beyond the 10-year legal liability limit.
Basing its cost estimate on 42,000 "failures" the report says the total cost of fixing them is $11.3b.
The previous government held an inquiry into leaky homes, which concluded the problems were caused by shoddy materials, poor building and inadequate inspection procedures.
It set up a resolution process, which became bogged down in litigation and delays. Many homeowners gave up hope of ever being able to recoup their losses.
The report focused on homes built between 1992 and 2008, It said failure rates since 2006, when regulations were changed, appeared to be much lower than in previous years.
The report said that under current policy, repair costs were distributed on the basis of 69 percent to the owner, 25 percent to councils, 4 percent to third parties and 2 percent to the Government.
Mr Williamson said he commissioned the report because he wanted to know the real extent of the problem so the Government knew how to respond to it.
He gave no details of the rescue package, saying only that it would be brought together "as a priority".
NZPA