Here’s what flood risks mean for the housing market
Saturday, 31 January 2026
As severe weather becomes more frequent and costly, buyers are increasingly wary of buying homes in higher-risk areas — at least in the aftermath of an event.
Regions around the country have been hit by significant storms and flooding more frequently and more often. This summer Bay of Plenty, Northland and Coromandel were battered by heavy rainfall with deadly consequences.
'I think we are all aware these risks are probably only going to get worse,' says Glyn Delany of Summit Real Estate in Nelson.
But experts says those risks haven’t yet been priced into the market.
The Post talked to some experts to find out what this all means for housing markets in different parts of the country.
Read More:
Ray White Group chief economist Nerida Conisbee has analysed the impact of natural disasters on property markets and found they could lead to different market outcomes.
While her research focused on Australian markets, the findings are relevant for New Zealand too.
She says that after a natural disaster some locations recover and go on to perform strongly, while others experience lasting demand constraints.
“It’s often not the disaster itself that determines long-term price outcomes, but whether repeated events alter perceptions of ongoing risk and future viability.”
The speed and strength of recovery depends on key factors, including insurance coverage, government response, rebuild quality, location desirability and broader market conditions, Conisbee says.
“But even in areas where more than 80% of properties face a high risk of becoming uninsurable due to flooding, most still recorded above-average price growth over the past five years.
“This suggests long-term climate risks may still be under-weighted in buyer decision-making.”
Markets will become more sophisticated in how climate-related risks are priced but the enduring appeal of lifestyle locations suggests risk will not be priced uniformly, she says.
In New Zealand, the Strand Marsden Project is the best research that has been done , Cotality head of research Nick Goodall says.
The study looked at house prices in South Dunedin after severe flooding in the area in 2015. It found they dropped 15% on average immediately after the flooding.
But they largely recovered over the next 12 to 18 months, although buyers still have a 3% to 6% discount relative to properties that are not in an at-risk area.
Goodall says with the big weather events that have occurred, such as the Auckland floods in 2023, he would expect something similar.
“But people have short memories. We live on a shaky island in the middle of the sea, so they know there are risks, such as floods, landslides and earthquakes, with property, and they still want to buy it.
“That may be because they know insurance will cover it - at this point. The question is how climate change and an increased number of severe weather events will impact long-term.”
It will mean greater scope for damage and people may be less willing and less able to buy in more at-risk places as the cost of insurance goes up to reflect that, he says.
“Eventually, banks and insurers won’t cover some places, and that means people will need good information about where and what they are looking at buying.
“Buyers are likely to get more cautious. For now though, it feels like these risks are not really being priced into selling prices.”
Auckland
It’s been three years since the devastating Auckland anniversary weekend floods, and while the region’s market has moved on there are lingering effects.
About 7500 homes around the region were affected by the flooding, with more than 3000 properties initially assessed as unsafe to enter.
Remediation has been ongoing but Auckland Council’s recovery programme is at its tail end, and the council’s latest figures show that 1038 of the 1201 properties eligible for buy-outs have settled.
But Mark Honeybone, from Harcourts Property Ventures, doesn’t think the floods had a long-term impact on pricing.
There was some impact on homes that were “red-stickered”, he says. “I sold a few affected properties after the floods, and that was difficult, but people forget pretty quickly.
“We used to get a lot more buyers asking about whether a property was affected and flooding risks. It still comes up, but most people don’t get too hung up on it these days.”
Buyers should ask about flood zones and get a LIM report on properties they are interested in, he says.
“But sometimes the LIM goes over the top, so they should actually look at a section, the low points and depressions, and assess what that might mean.
“Sellers have to disclose if a property has been affected, and a house is probably going to be OK, if it hasn’t been affected before, or is not on the edge of a river.”
Tim Hawes, from Ray White Kingsland - Grey Lynn, believes weather events have some impact on the market, but he questions how meaningful or widespread it is.
The number of properties that were significantly affected by the floods number in the hundreds rather than the thousands, and there are over 600,000 homes in the region, he says.
“So it’s less of a widespread concern than you might think. There is a spectrum though, and properties where there has been significant damage and there’s no real way to mitigate it are hard to salvage from a buyers perspective.”
Auckland’s flood zone maps have been updated, but it is hard for buyers to translate them into meaningful information because they represent topographical features, rather than show what will be flooded, Hawes says.
“They don’t assess if the drains in the surrounding areas are blocked, and they don’t take into account any man-made structures, for example, so they’re really a best guess on overland flow paths and risks.
“People don’t understand this, and it does knock some buyers’ confidence. But when you’re selling a house that is in a flood zone but has not been affected by flooding it doesn’t tend to be an issue.”
Buyers should always do comprehensive due diligence on any property they are interested in and factor in everything that could be a risk, he adds.
Wellington
Big natural disasters make Wellington’s property market run hot and cold, with buyers backing off places that have potential issues.
Sotheby’s managing director for the Wellington region Glen Jones says every time there is something like the Mount Maunganui landslide where six died last week, buyers reconsider similar options in Wellington.
Wellington’s a city rebuilt after disaster after disaster.
Early on it was earthquakes, two huge ones in 1848 and1855 destroyed much and the city was remade each time - often built on land reclaimed from the sea.
Add to that flooding - in 1898 a major flood covered the entire Hutt Valley floor forcing settlers to abandon parts of the growing area.
Now the city has all of that as well as slips, erosion and subsidence.
Jones says every time there is publicity about hazards it has an effect.
“A few years ago when we had lots of stories about sea levels rising we had people backing off from coastal properties. Then 18 months later coastal homes were selling again.”
Jones says some properties also had problems with being uninsurable, they have one currently on the market in Lower Hutt with a hill above it with that issue.
It also leads to insurers covering the property but only with exclusions for things like slips and it definitely puts buyers off, he says.
“Insurers look at proximity and it will be in the spotlight like never before now.”
He says with so many properties currently on the market if there was any uncertainty buyers would head off in another direction.
“Even with great presentation, great marketing, if there is something on the insurance or LIM report it will definitely affect the price and means the property stays on the market longer.”
Ilse Wolfe of Wolfe Property Coaching has had investors who won’t buy in some areas because of risk - including in Wellington.
“There is in places like Wellington an expected risk but some investors don’t want to go there,” she says.
“From an investor point of view - there are so many repeated events and they have to think about costs. Including things like insurance.”
She says Hawke’s Bay and Wellington had beefier operating costs in terms of insurance and rates.
Her main advice is to always purchase a LIM report and have a thorough look at council websites to understand their flood maps and the history of the property.
South Island
Canterbury has more property at risk from a 1-in-100-year flood than any other region, with $50 billion worth of buildings exposed, according to Earth Sciences New Zealand (formerly Niwa).
The West Coast is the most exposed region by population percentage, with up to 35% of residents potentially affected. It’s also the place where climate change could have the biggest impact on flood risk, with Nelson second.
Westport real estate agent Charlie Elley from Property Brokers in Westport, says buyers' focus on flooding is highest for a year or two after an event.
'Living here, we are always aware we live by a river, and there's a chance something might happen. But buyers weigh the risk, rather than running from it.'
Elley says buyers might secure insurance through a broker if the big companies' premiums are too costly and many do not have the option of buying elsewhere.
House prices in the Buller region are rising, with buyers taking an overall view of its lifestyle, climate and affordability, he says.
'Living here, we are still on a winner.'
Andrew Nichol from Christchurch property investment adviser Opes Partners says insurance costs and resale values have more influence on investors than homeowners when choosing property.
He says while Christchurch's riverside and low-lying suburbs are considered the most risky, the city’s maps show flood hazards 'all over the show'.
Buyers see new and recent builds as a good bet as they are elevated if necessary, he says.
'If you drive around and look along the rivers, you'll see properties that are way lower than others. In New Brighton, it is amazing to see how high all those new townhouses are built.'
Parts of the city such as the Flockton basin in St Albans and Mairehau were previously stigmatised because of frequent floods but have since been transformed by new stormwater infrastructure, he says.
In Nelson, Delany of Summit Real Estate says flood hazard maps have 'definitely had an effect' on values in Nelson and Tasman, especially in high-risk zones.
Insurance costs and resale concerns are 'at the forefront of people's minds' and deter risk-averse buyers, rather than the flood risk itself, he says.
'We didn't used to have the maps, you'd have to wait for the LIM. But now there are these public maps and anyone can look at them.
Delany says he could count on one hand the number of sales where LIM reports did not list a hazard such as flooding, slips, or earthquakes.
'But a lot of people want to live in The Brook, or on Tahuna(nui) hill for the views, or by the river. There's a lot of potential buyers.
“People move here for the lifestyle, more than anything else. But if there are fewer buyers for a home for whatever reason, the price will be lower.”
Read more on how the Government and insurers are reacting to weather events on www.thepost.co.nz on Sunday.