Leaky No More? What Buyers and Sellers Need to Know About Leaky Homes
Background: Auckland’s leaky building crisis of the 1990s–2000s left many homes with serious weather-tightness defects. These were often due to monolithic plaster cladding and poor construction, allowing moisture ingress and rot. Thousands of affected homeowners faced costly repairs (full recladding) or severe loss in value.
By mid-2020s, many such homes have been completely remediated – reclad with approved materials, signed off with building consents and Code Compliance Certificates (CCC). The key question is how these formerly leaky (now fixed) homes resell compared to homes that never had leaky issues.
At Ross Holmes Virtual Lawyers Limited, we've acted for both vendors and purchasers of leaky and ex-leaky homes. Here’s what you need to know — with real-life stories (names changed) that show how things can go wrong or right.
The Stigma of a Leaky Past
Figure: A comparison of cladding on a formerly leaky Auckland home. Left: original 1990s–2000s style monolithic plaster exterior (“plaster look” linked to leaky homes). Such a cladding change not only resolves moisture issues but also greatly reduces the stigma. Buyers tend to view homes reclad in traditional weatherboard more favorably, often paying prices comparable to similar houses that never leaked wiseup.nz. In contrast, if a leaky home is repaired but reclad with new plaster cladding, a slight lingering stigma can still cause a modest price discount (few percent) on resale wiseup.nz.
Buyer sentiment: There is still a psychological stigma attached to any home with a leaky history. Even after a full repair and council sign-off, some buyers remain skeptical that the house is truly fixed. As University of Auckland property researcher Dr. Michael Rehm notes, certain buyers will “use that stigma to discount any offer they made” on a former leaky home rnz.co.nz. The property’s history is usually recorded in council LIM reports, so prospective buyers learn of the past issues. This can narrow the buyer pool – a portion of buyers simply avoid ex-leaky homes out of caution. Real estate advisers observe that a remediated leaky home “is on record, saddling it with a stigma among skeptical buyers despite the fact it has passed careful council inspection” wiseup.nz.
On the other hand, many buyers acknowledge that a properly reclad house (with CCC) is effectively as good as new on the outside. In fact, full remediation often means the home now meets modern building standards (with drained/vented cavities, treated timber, etc.). Such a house may even be more robust than an original older home that never leaked. For this reason, when the repair is done right (especially with a change to a trusted cladding like weatherboards), the market’s confidence can be largely restored. Recent research confirmed that Auckland houses which have been fully fixed and reclad in non-monolithic cladding sell for the same prices as equivalent homes that never had leaky issues goodreturns.co.nz. In these cases, buyers essentially put well-remediated homes “on a par with homes not affected by leaky building syndrome” rnz.co.nz. Even with a full reclad and CCC, homes that were once leaky can carry a lingering stigma. LIM reports record the property’s history. Some buyers are cautious, others steer clear completely.
Case study: ‘Sam and Belinda’ Sam and Belinda purchased a two-level plaster-clad home in Remuera in 2002. In 2012, they discovered moisture damage due to leaking cladding and reclad the home in new monolithic plaster. Despite having a CCC and extensive documentation, buyers in 2024 were wary. It took over six months and multiple price drops before it sold — for about 5% below comparable homes.
✅ Lesson: Have all your paperwork ready. A professionally reclad home with a CCC, quality cladding, and clear council records will gain better buyer trust — but expect more questions.
Market Trends: What the Data Shows
General market trends show that the price gap between remediated leaky homes and non-leaky homes has narrowed significantly in recent years. Several studies and market analyses in New Zealand have quantified the impact:
Early Estimates (c.2010s): At the peak of the crisis, leaky homes (even after basic repairs) suffered major stigma. A 2017 Massey University study found that monolithic-clad homes – the typical leaky-home style – carried a general value discount of ~11% due purely to stigma, “irrespective of their actual condition”nzherald.co.nz. Even after full repairs, buyers often demanded an additional 5–10% “post-remediation” discount, depending on the severity of the original issues nzherald.co.nz. In worst cases, values could drop up to 20%+. (That study noted price drops “up to 21%” for some 1990s/2000s homes nzherald.co.nz – nearly $300k below an average Auckland house’s value at the time.) This early research suggested that choosing a more traditional-looking cladding for the reclad (e.g. weatherboard) could minimize the post-repair discount to around 3–4% nzherald.co.nz.
Recent Study (2019, Auckland sales data): A comprehensive University of Auckland analysis looked at actual sales of reclad houses versus comparable non-leaky houses. The findings were optimistic for owners of fixed homes. Fully reclad homes with non-monolithic cladding showed no significant price stigma – they sold “for the same prices as unaffected dwellings”goodreturns.co.nz. In other words, a standalone house in Auckland that had leaky issues but was completely remediated (and perhaps now sports weatherboard or other trusted cladding) generally fetched market value on par with an always-dry house. This indicates that post-remediation stigma was essentially eliminated when the cladding type was changed. “Our study shows that post-remediation stigma does not exist in the Auckland housing market,” Dr. Rehm stated, meaning a well-remediated home can achieve full value auckland.ac.nz.
Cladding Choice Matters: However, the same 2019 study noted a caveat. If a leaky home was repaired but reclad again in a monolithic plaster system, a general stigma discount of about 6% persisted goodreturns.co.nz. Buyers remained wary of the appearance of continuous plaster even if it was a new, code-compliant system. Notably, this ~6% discount is slightly better than the ~9% discount observed for homes that still had original monolithic cladding and no remediation goodreturns.co.nz. In effect, any house with that plaster style tends to be valued a bit lower by the market – but a reclad plaster home at least does better than an unrepaired one. Still, the best outcome for value was to switch to weatherboards or other non-monolithic claddings, thereby erasing the price penalty auckland.ac.nzauckland.ac.nz.
Unrepaired Leaky Homes: For context, homes that remain leaky or unrepaired are heavily discounted in the market – often selling for “hundreds of thousands less” than comparable dry homes in the same area wiseup.nz. Essentially these trade at land value minus demolition/costs in many cases. For example, one Auckland “plaster disaster” home (unrepaired, in a prime school zone) still attracted multiple bidders but sold about $655,000 below its unaffected value (CV)oneroof.co.nz, as buyers priced in the cost and risk of rebuilding. Fully remediating such a home can recover most of that lost value. After recladding and obtaining CCC, the property’s value often realigns with the local market – a turnaround from potentially 20–30% undervalued (if unrepaired) to near 100% value (when properly repaired).
Summary of Value Differences: Recent market data and expert commentary suggest the following resale value outcomes for Auckland standalone houses:
✅ Never-leaky homes command 100% market value.
✅ Fully reclad homes with traditional cladding (e.g., weatherboard) also generally sell at 100% value, assuming quality remediation and full certification. goodreturns.co.nz.
⚠️ Fully reclad homes with new monolithic plaster may attract a 5–6% discount due to lingering stigma: goodreturns.co.nz..
❌ Unrepaired leaky homes often sell at 20–30% below value — sometimes at land value only since the house itself is compromised (these typically appeal only to bargain hunters or developers prepared to reclad or rebuild). nzherald.co.nz..
Resale Challenges and Market Considerations
Even when resale prices can be on par, selling a formerly leaky home can involve extra challenges. One is buyer due diligence – prudent buyers will insist on thorough building inspections, invasive moisture tests, and verification of all council paperwork. As the Auckland Council advises, a pre-purchase weathertightness inspection is essential for any plaster-clad house aucklandcouncil.govt.nz. Sellers of remediated homes are usually encouraged to provide a full info pack: copies of the building consent, CCC, engineers’ reports, and any transferable warranty from the recladding work. Having this documentation ready can increase buyer confidence and streamline the sale.
Time on market: Because of the stigma, a remediated leaky home might take longer to find the right buyer. RNZ News noted that such properties “still carry a stigma that can make them harder to sell”rnz.co.nz – for example, you might get fewer offers initially, or opportunistic buyers trying to negotiate a discount. However, when demand is high (as seen during Auckland’s recent property booms), well-located remediated homes can still spark competitive bidding. In a strong market, price differences tend to shrink since buyers are more willing to accept a previously leaky home, provided it’s now sound. In a softer market, sellers may need to work harder to reassure buyers or adjust price expectations slightly to account for any lingering doubts.
Financing and insurance: Notably, once a leaky home is fully repaired with a CCC, banks and insurers generally treat it like any other compliant house. The major hurdles (limited lending, high insurance premiums) usually apply to unrepaired leaky buildings. After reclad+CCC, the home is legally up to code. (By contrast, banks often lend only ~50% on an unrepaired leaky property, reflecting the risk wiseup.nz.) Thus, a repaired home with paperwork in order should not face unusual financing issues for buyers – an important factor that helps its resale value approach the market norm.
Conclusions and Insights
In summary, the resale value gap between a formerly leaky Auckland home (fully remediated) and a never-leaky home is much smaller today than it once was – and can be virtually zero if the remediation is done right. Early in the leaky homes saga, buyers heavily penalized even repaired homes (with studies showing ~10–15% value hits despite remediation) nzherald.co.nz. But as the market learned and thousands of homes were successfully fixed, the “leaky home stigma” has eased. A 2019 Auckland analysis concluded that there is no inherent post-repair discount in the current market – meaning a sound, code-compliant reclad house can fetch full value like any comparable property auckland.ac.nz.
That said, perception is key. The market still judges a house by its cladding to some extent. Replacing the problematic monolithic exterior with a trusted material (weatherboard, brick, etc.) is often necessary to fully restore buyer confidence auckland.ac.nz. Sellers of formerly leaky homes should be prepared to address lingering concerns and highlight the new weathertightness. When properly marketed (emphasizing “fully reclad with CCC in [Year]” and perhaps “new exterior, new roof, etc.”), these homes can overcome their past. As one real estate commentary put it, “leaky homes which have been fixed, made weathertight and reclad in non-monolithic cladding... are selling for the same prices as unaffected dwellings” goodreturns.co.nz.
Bottom line: In Auckland’s current housing market, a standalone home that was once leaky but is now completely remediated (with council sign-off) generally commands a similar resale value to an equivalent home that never had issues. Any price difference is typically minor – perhaps a few percent lower if the home still resembles its former self – and can often be mitigated by wise remediation choices and transparent sale practices. The home’s location, features, and overall market conditions end up driving the price more than its past history. Still, the journey to that sale may involve overcoming more buyer scrutiny and educating the market, because the phrase “ex-leaky home” will likely remain a talking point (and a source of caution) for years to come nzherald.co.nzrnz.co.nz.
Sellers: Tips Before You List
Gather all documentation: Building consent, CCC, engineers' reports, warranties.
Preempt buyer concerns with clear info packs.
Use marketing phrases like: "Fully reclad with Code Compliance Certificate (CCC) issued in 2021."
Be honest — but also confident in the quality of the work done.
Buyers: What to Ask
Ask for LIM and property file.
Review the CCC carefully.
Commission an invasive moisture test (even if reclad).
Check if bank lending or insurance will be affected.
References and Sources
New Zealand Herald – “Repaired leaky homes worth 1/4 less” (Jan 2017) – report on Massey University study of leaky home stigma nzherald.co.nznzherald.co.nz.
RNZ News – “Leaky home stigma, it is still a thing. Kinda.” (July 2019) – discussing latest research by Dr. Michael Rehm (University of Auckland) rnz.co.nzrnz.co.nz.
University of Auckland Business School – Research findings on reclad home sales vs non-leaky homes (2019) auckland.ac.nzgoodreturns.co.nz.
Good Returns (NZ) – “No monolithic cladding, no price stigma” (June 2019) – summary of Auckland house sales analysis goodreturns.co.nzgoodreturns.co.nz.
Wise Up NZ – Buying a Leaky Home in NZ – advisory article compiling expert data on value impacts and buyer perception wiseup.nzwiseup.nz.
OneRoof (NZ Herald) – real estate news on Auckland leaky homes and market anecdotes (2023) oneroof.co.nz.
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