Few numbers affect New Zealand commercial property values as much as a building’s seismic rating, and few are as widely misunderstood. A percentage of New Building Standard is not a probability of collapse, not a safety guarantee, and not a fixed property of a building. It is an engineering assessment against a reference standard, and it depends heavily on how the assessment was done.
What the NBS percentage measures
A rating is written as a percentage of New Building Standard, usually shortened to %NBS. It expresses a building’s expected seismic performance as a percentage of what would be required if it were designed new today, on that site, for that use. A building assessed at 40%NBS is expected to perform at 40 percent of the current standard.
Two things follow that are not obvious. The reference standard is location-specific, so identical buildings in Wellington and Dunedin rate differently because expected shaking differs. And the standard changes over time, so a rating from a decade ago may not mean what an equivalent number means now.
The earthquake-prone threshold
Under the Building Act, a building is earthquake-prone if it is assessed at less than 34%NBS and would be likely to collapse in a moderate earthquake causing injury, death or damage to other property.
Territorial authorities identify potentially earthquake-prone buildings, issue notices, and set deadlines for remediation. Timeframes depend on seismic risk area and whether the building is a priority building — those on strategic routes, or with particular occupancy characteristics. Notices must be displayed on the building itself.
The threshold is a legal trigger, not a safety cliff. A building at 35%NBS is not meaningfully safer than one at 33%NBS. It simply is not captured by the statutory regime.
Why 67 percent matters commercially
67%NBS has no statutory status whatsoever. It exists because engineering guidance has long treated it as the threshold below which risk to occupants becomes materially elevated relative to a new building, and the market adopted it.
The commercial consequences are substantial and largely disconnected from the legal position:
- Institutional and government tenants commonly require 67%NBS or better as a leasing condition.
- Insurers price below that threshold differently, and cover can become harder to place.
- Lenders apply it in valuation and lending criteria.
- Purchasers discount for it, and due diligence routinely turns on it.
A building can be entirely legal at 40%NBS and still be commercially difficult to lease, insure and finance. Owners who focus on the 34 percent statutory line and ignore the 67 percent market line are frequently surprised.
Not all assessments are equivalent
An Initial Seismic Assessment is a relatively coarse screening based on limited investigation. A Detailed Seismic Assessment involves site investigation, structural analysis and modelling of the actual building.
The difference is significant, and it moves in both directions. Buildings screened as poor performers have been reassessed considerably higher on detailed analysis, and buildings assumed adequate have come in lower. Before making a decision on a coarse number, understand which type of assessment produced it, when, and by whom.
What owners should do
- Know your actual number and its provenance — the type of assessment, the date, and the standard applied.
- Check for a council notice and its deadline. These run to fixed dates and do not pause.
- Get a detailed assessment before deciding to strengthen where an initial assessment is the only basis. Strengthening is expensive and the scope should be driven by real analysis.
- Read your lease. Seismic obligations, who pays for strengthening and what happens if a rating falls are increasingly negotiated terms.
- Factor in disruption. Strengthening frequently requires vacant possession, and lost rental is often the larger cost.
Where to find reliable information
MBIE administers the earthquake-prone building system and publishes the methodology and guidance at building.govt.nz, including the national register of earthquake-prone buildings. Territorial authorities publish their own registers and deadlines.
For anything involving a specific building, the answer comes from a chartered professional engineer with the relevant experience, not from a general rule.
