History suggests Chch will avoid decline

NZPA

Friday 8th July 2011 1 Comment

Christchurch should avoid depopulation and decline, while its post-quake reconstruction should be accompanied by a period of rapidly rising wages and housing costs, if it follows historical precedents, two economists say.

Westpac chief economist Dominick Stephens and senior economist Felix Delbruck reviewed the experience of past disasters to try to shed some light on the economic impact of the earthquakes that have hit Canterbury since last September.

While major earthquakes could cause enormous destruction, they did not tend to disrupt developed economies for long, they said in a note today.

The extent of population loss after disasters depended on the degree of local damage, with most people returning to habitable areas, while those who moved did not tend to move far.

"Christchurch was a growing and economically viable city before the quakes, and has no serious rival as the South Island's main urban centre," the note said.

If it followed the example of history, reconstruction should be accompanied by a period of rapidly rising wages and housing costs, with the city avoiding depopulation and decline.

For New Zealand as a whole, the example of other developed countries pointed to economic disruption being short-lived, although it was likely to be longer lasting in Christchurch.

The note raised the possibility that the quakes had accelerated a long term trend of departures to Australia, with data showing an unusually high number of long term overseas departures from Christchurch in the past three months.

But historical evidence did not point to a major exodus, the note said.

People tended to move close to home, so a population shift within Christchurch was more likely, with people moving to habitable parts of the city.

In the six weeks after the February 22 quake 6.5 percent of Christchurch households had mail redirected, while in June 7 percent of students in the city were still going to a different school from the one they were going to before the quake.

Lessons for a post-quake New Zealand from academic studies of disasters were generally positive, the note said.

Developed countries tended to recover from disaster quickly, with quakes tending to boost growth in following years as destroyed areas were rebuilt.

In the long run, there was no clear evidence that quakes on the scale of those in Canterbury affected growth either way.

In one study, carried out to find how disasters affected population trends, most of the cities studied returned to pre-disaster population trends within one or two decades, the note said.

The exceptions -- Dresden after bombing in 1945, and New Orleans after Hurricane Katrina -- were already experiencing population decline.

The author of that study argued that in fast-growing cities, disasters triggered a building boom until pre-disaster housing stock was restored.

Comments from our readers

On 11 July 2011 at 4:32 pm Wal said:

Dresden can't be compared with the disaster and consquently decline of population..Dresden was situated in the russian zone and no German in his/her right mind wanted to stay under russian rule.