Likely it be most expensive non-earthquake disaster in New Zealand, a picture is beginning to form about the long term implications of the flooding that will impact the entire country, writes Anna Rawhiti-Connell in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

“Likely New Zealand’s most expensive non-earthquake disaster”

I visited New Orleans in 2018. Almost everyone we spoke to used “pre and post Katrina” phrasing when talking about their city. The scale of devastation wrought by Hurricane Katrina, the loss of life, cost of recovery and toll on the people of that city are in no way comparable to what’s happened in Auckland and other areas in the North Island, but that observed division of past and future has been rattling round my head since Saturday, and a picture is beginning to emerge of what the longer term impacts of the floods here will be. As it stands, finance minister Grant Robertson says the floods are likely New Zealand’s most expensive non-earthquake disaster.

Some parts of Auckland may become too expensive to insure by mainstream insurance companies

Infometrics principal economist Brad Olsen’s early “best estimate” of the recovery cost is around $466m and is important to note it is early days. Insurance claims could hit nearly $1b. Massey University’s Michael Naylor writes that in the worst case scenario, the weekend’s floods might mean some sections of Auckland become too expensive to insure by mainstream insurance companies.

Fund to fix roads will soon be exhausted

Olsen has also noted (paywalled) that there’s likely to be considerable infrastructure costs to repair transport networks “which will put further pressure on Waka Kotahi’s emergency repairs budget”. As the Herald’s Thomas Coughlan writes, the fund the government uses to fix storm-ravaged roads will soon be exhausted thanks to the number of costly storms trebling in the last five years. In the Coromandel, we don’t have any timeframe for when SH25A might be fixed as we’re not even sure we have the expertise in the country to do it. That’s a main route into that area, now cut off.

The downstream effects

Writing for BusinessDesk, economist Cameron Bagrie has a good piece this morning (paywalled) on the cost of “mother nature’s wrath”. Where once central banks had to contend with the odd supply shock, “we’re now facing what appears to be a rolling series of supply shocks.” interest.co.nz’s Rebecca Stevenson writes that construction projects may be delayed for several months as civil contractors prioritise emergency flood repair and construction costs may remain high. There are about 600,000 consented dwellings in Auckland. With 2,300 property assessments completed, Auckland council expects there are between 4000 to 6000 properties still to be assessed. That’s 1.3% of the city’s housing stock. Landlords are already warning that rents in the city will go up as remedial work to flood-damaged properties affects supply and demand.