New Zealand has Verifiedly announced in September 2025 a major reform of its earthquake-prone building system (EPB). This policy shift aims to refocus seismic risk management on genuinely unsafe structures while reducing unnecessary compliance burdens. In this guide, we explain what this reform means for property owners, local councils, and investors in New Zealandβs real estate market.
The government stated that the current approach, largely based on NBS (New Building Standard) percentage scores, will be phased out. Instead, assessments will prioritise evidence of actual risk, particularly for smaller low-rise buildings. Letβs dive into the details, supported by Verified sources like the Beehive announcement.
π Key Reform of Earthquake-Prone Building System in New Zealand
- Why Was the Earthquake-Prone Building System Changed?
- What Are the Main Features of the 2025 EPB Reform?
- π‘ What Does This Mean for Property Owners and Investors?
- How Will Local Councils and Businesses Respond?
- π· How Will This Affect Construction and Insurance Markets?
- Summary of Benefits and Risks for Stakeholders
- Summary
- FAQ: New Zealand Earthquake-Prone Building System Reform
Why Was the Earthquake-Prone Building System Changed?
The earthquake-prone building framework was originally introduced to strengthen resilience following devastating earthquakes in Christchurch (2011). However, stakeholders have criticised that many buildings with low NBS scores were not necessarily unsafe, yet owners faced high retrofitting costs. By 2025, more than 1,700 building notices were issued nationwide, raising concerns of over-regulation and stalled redevelopment projects.
Through consultation with engineers, property councils, and local authorities, the government recognised that resources were misallocated. As a result, the reform emphasises:
- Targeting genuinely dangerous structures rather than blanket NBS thresholds.
- Reducing compliance costs for small towns and heritage buildings.
- Allowing councils to prioritise risk hotspots rather than process all low-score buildings equally.
Insight: Real estate investors interviewed by the New Zealand Herald mentioned that redundant compliance was discouraging redevelopment in regional centres. This change is expected to unlock investment opportunities while maintaining seismic safety.
What Are the Main Features of the 2025 EPB Reform?
The new framework introduces several changes relevant to property owners and tenants:
- Removal of NBS Thresholds: No longer will a simple percentage define earthquake risk.
- Focus on Actual Risk: Engineers will assess geological and structural conditions instead of arbitrary scores.
- Exemptions for Low-Rise Buildings: Three-storey buildings and under, especially in low-risk areas, will face reduced compliance.
- Prioritisation: Councils can concentrate resources on critical urban centres and transport hubs.
Case Example: A small retail block in Palmerston North previously required $500,000 retrofitting despite low seismic activity. Under the reform, it may no longer be classified as earthquake-prone, saving owners significant capital.
π‘ What Does This Mean for Property Owners and Investors?
If you own a property in New Zealand, the reform could directly impact your financial planning. For landlords, reduced seismic upgrade requirements mean less pressure to raise rents. For investors, redevelopment in secondary towns may accelerate due to lower compliance barriers.
However, owners of large commercial properties in Wellington or Christchurch must remain cautious. Buildings in high-risk seismic zones are still a priority and will continue to face strict safety obligations.
| Building Type | Old System (NBS) | New Reform 2025 |
|---|---|---|
| 3-storey retail block | Earthquake-prone if <34% NBS | Exempted unless actual risk identified |
| Heritage church building | Compulsory seismic retrofit | Case-by-case with heritage preservation considered |
| High-rise office in Wellington | Strict retrofit if low NBS | Still priority risk, stronger enforcement |
How Will Local Councils and Businesses Respond?
Councils gain more discretion to allocate resources where they matter. For example, Auckland Council may deprioritise low-risk suburbs while focusing on CBD infrastructure. Businesses leasing commercial spaces can negotiate lower rents when landlords avoid unnecessary retrofit expenses.
Industry experts such as the New Zealand Property Council have welcomed the reform. They believe it strikes a balance between seismic safety and economic feasibility. This could revitalise investment flows into regional commercial properties.
π· How Will This Affect Construction and Insurance Markets?
The construction sector may see fewer forced retrofitting projects, but demand for seismic expertise will remain strong in high-risk regions. Meanwhile, insurers could adjust premium structures, distinguishing between genuinely unsafe and safe buildings more precisely.
Expert Insight: A Wellington-based insurance broker told RNZ that premiums for compliant buildings might even fall, as underwriters gain more confidence in risk-based assessments.
Summary of Benefits and Risks for Stakeholders
To wrap up, here are the key points property owners and investors should remember:
- π Small low-rise properties: Reduced compliance, lower costs.
- π Heritage and regional buildings: More balanced risk vs. preservation.
- π’ High-rise CBD properties: Still subject to strict seismic safety laws.
- π° Investors: Opportunity to revisit stalled projects in provincial towns.
Verified Reference: Ministry of Business, Innovation & Employment (MBIE) will release detailed technical guidance in Q4 2025.
Summary
- New Zealand announced a major reform of the earthquake-prone building system in 2025.
- Focus shifts from NBS percentages to actual seismic risk.
- Exemptions for low-rise buildings reduce compliance costs.
- Councils can prioritise resources effectively.
- Impacts investors, landlords, insurers, and construction industry stakeholders.
FAQ: New Zealand Earthquake-Prone Building System Reform
What is the main change in the 2025 EPB reform?
The NBS-based threshold is removed, and assessments will now focus on actual seismic risks.
Will all small buildings be exempted from compliance?
No. Exemptions mainly apply to low-rise buildings in low-risk zones. Structures in high-risk areas must still comply.
How does this affect building insurance in New Zealand?
Insurance premiums may decrease for buildings assessed as low risk under the new system, but high-risk buildings could still face high premiums.
When will the reform take effect?
The new system is set to roll out progressively from early 2026, with guidance issued by MBIE later in 2025.
How should property owners prepare?
Owners should consult engineers to reassess building risks and engage with councils for updated compliance schedules.