How earthquakes affect property prices
Seismic risk is one of the few factors that lowers property values for a long time and in a measurable way. This is not a forecast but a finding from markets where the risk has been officially mapped and prices can be tracked for years.
- New Zealand. After the 2010–2011 earthquakes, land in Christchurch was classified by liquefaction risk. By the third year, homes in the highest-risk category had lost 17.7% of their value relative to neighbouring land, and the gap has held steady at around 13%.
- California. When a plot is placed inside an official active fault zone, its value falls by 6.6% on average and its rent by 3.3%.
- Tokyo. According to the official seismic hazard map, land in the riskiest zones is about 10% cheaper than in the safest ones.
- Japan overall. Before major earthquakes, buyers barely priced in seismic risk. Afterwards, the discount in hazardous areas became noticeable and more than doubled.
What this means for a buyer
Three patterns repeat across all these markets.
- Prices react to visible risk. A discount appears once the risk is officially disclosed or the country has lived through a strong earthquake. Earlier risk maps of Christchurch that nobody paid attention to had no effect on prices.
- The building matters more than the country. Within the same city, the biggest discounts hit buildings constructed before current seismic codes, on weak soils or close to a fault. In Istanbul this has shown up in bank valuations since 2023.
- Commercial property is penalised harder. In Wellington, commercial buildings officially classified as earthquake-prone sell for 45% less on average.
For an investor, an earthquake map is therefore not geography but part of the valuation of a property. It shows how likely a shock that changes the price is, and in which parts of the country it is more likely.
What to check before buying in a seismic country
- The year of construction and which edition of the seismic code the building was designed to.
- The type of soil and the distance to active faults.
- Earthquake insurance: whether it is mandatory and what it covers.
- For high-rises, an independent structural report, not just the developer’s documents.
Earthquakes in Indonesia and the property market
The map window covers all of Indonesia plus Malaysia, Timor-Leste, the southern Philippines and western New Guinea. The catalogue threshold here is M 5 rather than 4.5, because the window holds too many weaker events. Between 1926 and 2026 it recorded 1,432 earthquakes of magnitude 6 and above, 159 of them of magnitude 7 and above. The strongest was M 9.1, on 26 December 2004, off Sumatra.
For property in Indonesia, the danger lies not only in the shaking but in what it triggers. The 2004 tsunami reached run-up heights of 15–30 m, and more than 500,000 people in Indonesia lost their homes. In Palu in 2018, soil liquefaction displaced about 180 ha in Petobo and 47.8 ha in Balaroa. The 2006 Yogyakarta earthquake (M 6.3) destroyed about 154,000 houses and damaged another 260,000.
For a buyer, this means that the plot's location and soil matter more than an island's average seismicity. Before buying, check how far the property is from the shore, what ground it stands on and which building code the structure was designed to, and consult the data of the Meteorology, Climatology and Geophysics Agency (BMKG). Our materials contain no data on how seismic risk is priced into housing in Indonesia, so the patterns from other markets described above serve as a guide.
Questions and answers
- Does seismic risk affect property prices?
- Yes. Studies from Japan, California, New Zealand and Turkey show that housing in high seismic-risk zones is cheaper, and the gap widens after strong earthquakes.
- How much cheaper is housing in earthquake-prone areas?
- Between 2% and 18%, depending on the study. The gap is largest where the risk is officially mapped: 13–18% in Christchurch, about 10% in Tokyo and 6.6% in California.
- What matters more — the country’s seismicity or the specific building?
- The building. Within the same city, the biggest discounts hit buildings constructed before current codes and those on weak soils or near faults.
- Where does the map data come from?
- The USGS ComCat earthquake catalogue: all events of magnitude 5 and above from 1926 to 2026, downloaded on 11 October 2026. Faults are drawn schematically from published reviews.