Preceptions of risks from earthquakes on house prices

What is it about?

This paper aims to investigate residents’ perceptions of risk towards owning and living in residential property in Christchurch subsequent to the 2010 and 2011 Canterbury earthquakes to identify how these perceptions impact on the price residents are willing to pay for affected property. Such market behaviour can motivate homeowners to adopt risk mitigation measures.

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Why is it important?

The outcomes of this research will be of interest not only to homeowners wanting to know how their home’s value has been impacted by market perceptions towards earthquake and liquefaction damage, particularly in the worst-affected areas, but also the rating valuers tasked with assessing property values for rating purposes. Property developers and builders involved in the repair of existing homes and construction of new homes will also want to know current market preferences. Government bodies will find the results informative of how the media has, and can be used, to motivate market behaviour towards risk mitigation, particularly in regard to “material risk” (as described in Solberg et al., 2010), that is risk from a scientific and technical viewpoint of probability of future risk, and as related to what has become known about these risks in terms of building structure, height, age, soil type/land categories and flood zones. Further, the results provide a gauge of how the community perceived the handling of the recovery process, so that the weaknesses highlighted can be addressed, which will help restore community trust.