Seismic Reform – Complete Overview for Auckland Central
Prepared by Chris Cairns | Cairns & Co - Ray White Auckland Central
As discussed in recent updates, seismic reform is one of the most significant structural policy changes facing central city property in 2026. With submissions now closed, here is a complete and factual overview of how the current system works, what is proposed to change, and what it could mean for owners and buyers in Auckland.
Timing update
Submissions on the Building (Earthquake-prone Buildings) Amendment Bill closed on 16 February 2026. The Bill is progressing through Parliament and must pass its remaining readings before receiving Royal Assent. Until that occurs, the current earthquake prone building regime remains in force.
Bill information:
https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_135922/building-earthquake-prone-buildings-amendment-bill
The current system – how it works
The present framework is governed by the Building (Earthquake-prone Buildings) Amendment Act 2016, which came into effect nationally from 2017.
Legislation:
https://www.legislation.govt.nz/act/public/2016/0022/latest/DLM5616102.html
The system measures how a building would perform in a moderate earthquake compared with a brand new building designed under today’s Building Code. The result is expressed as a percentage of New Building Standard, commonly referred to as %NBS.
An engineer assesses the structure, including construction type, lateral load systems, connections, age, materials and known weaknesses. The building’s estimated seismic performance is then compared against current code requirements.
The key thresholds are:
100% NBS
Equivalent to a new building under current code.
67% NBS
Commonly viewed by lenders as a comfort benchmark.
34% NBS or below
Legally classified as earthquake prone.
If a building is assessed at 34% NBS or lower, the council must issue an earthquake prone building notice. The building is placed on the national register, and the owner is required to strengthen or demolish it within prescribed timeframes.
New Zealand is divided into high, medium and low seismic risk areas. Auckland is currently classified as low risk, meaning longer compliance timeframes than Wellington or parts of the South Island. However, the strengthening obligation still applies under law.
What this has meant for Auckland Central
Many older character buildings in the CBD have been assessed below 67% NBS, and some below the 34% earthquake prone threshold.
Even though Auckland’s underlying seismic risk is comparatively low, the national framework applies the same percentage triggers. In practice, this has resulted in:
• Expensive engineering investigations
• Large strengthening projects
• Special levies running into millions
• Lending restrictions
• Insurance complications
• Buyer hesitation and price discounting
It is important to note that a low %NBS rating does not mean a building will collapse. It is a relative benchmark against today’s code. However, in the marketplace, lower ratings have carried stigma and financial consequence.
What is being proposed
The Government has announced a shift toward a more targeted, risk based system.
Announcement:
https://www.beehive.govt.nz/release/earthquake-prone-building-system-refocused
Under the proposal, Auckland, Northland and the Chatham Islands would be removed entirely from the earthquake prone building regime. The rationale is that regulatory settings should reflect actual regional seismic risk.
This is not yet law. The Bill must pass its remaining stages in Parliament before the change takes effect.
If enacted, Auckland would no longer be subject to the mandatory earthquake prone building framework, meaning the 34% NBS threshold would not trigger legal strengthening obligations in this region.
What this could mean for owners
If Auckland is formally removed from the regime:
• Mandatory strengthening deadlines tied to earthquake prone notices would fall away.
• Future compliance driven special levies may be avoided.
• Body Corporate balance sheets become clearer.
• The regulatory overhang attached to low NBS ratings reduces.
For owners in older character buildings that have been burdened by compliance uncertainty, this represents potential financial relief and improved saleability.
What this could mean for buyers
Buyers typically price risk.
When a building carries a low NBS rating under the current regime, buyers factor in:
• The risk of future levies
• Lending constraints
• Insurance limitations
• Resale liquidity concerns
If Auckland is removed from the regime and strengthening obligations are no longer mandatory, that risk premium may reduce.
Two important practical factors will shape the outcome:
Bank policy
Lenders will determine how quickly they adjust internal credit settings once legislation changes.Insurance underwriting
Insurers will reassess exposure based on the new legal environment.
The law may change first. Financial institutions will follow based on their own risk frameworks.
Market implications
As previously discussed, we are already positioning campaigns to reflect this direction of travel. Policy reform, even before enactment, influences buyer sentiment.
For owners of affected buildings, the proposal signals a potential reset in how character stock is assessed.
For buyers, it may shift the conversation from compliance burden to architectural merit and location fundamentals.
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