By Campbell Massey

Practising in Waihi, I’ve started to notice a trend that feels subtle at first but is beginning to reshape how we approach property deals in regional New Zealand.

Over the past year, banks have become noticeably more restrictive in their insurance requirements, and insurers more selective - particularly here in Waihi, where mining activity and unconsented modifications are part of the local property landscape.
For many buyers, that shift isn’t theoretical. It’s the difference between being able to settle - or not.

Traditionally, purchasers relied on broad due diligence conditions to cover issues like these. But vendors dislike them. They can feel too open-ended, too uncertain.
In practice, I’ve found that a targeted insurance condition can achieve a better balance: it gives the purchaser a clear exit route if cover can’t be obtained (or if premiums are unreasonable) while still keeping the agreement attractive to the vendor. It’s becoming one of the most important clauses we draft.

Recent commentary from LawNews confirms what we’re already seeing on the ground - insurers are moving toward risk-based pricing. Some homes, especially those in flood-prone or geologically active areas, are now uninsurable, or only insurable at significantly higher premiums.

And that has serious implications for first-home buyers.

When every dollar of lending counts, a steep insurance premium can be the final nail in the coffin for affordability.

If a buyer can’t secure reasonably priced cover, they can’t satisfy their lender. And if their agreement doesn’t have an insurance condition, they may still be contractually bound to settle. That’s not a legal technicality - it’s a financial trap.

Looking ahead, I think we’ll see insurance shift from a procedural tick-box to a decisive factor in whether a deal can even proceed.

As property values climb and lending tightens, insurance is set to play a more influential role in the transaction process than ever before.

For us as practitioners, that means re-thinking what “standard” conditions really protect.

And for buyers, particularly those entering the market for the first time, it means understanding that insurance isn’t just about protection after purchase, but a key determinant of whether purchase is possible at all.

If insurance is becoming the new barrier to entry, are we prepared - legally and practically - for what that means for affordability and access to housing in regional New Zealand?