Damage from New Zealand’s worst earthquake in eight decades may total as much as NZ$4.9 billion ($3.6 billion) and take four years to repair, according to a Goldman Sachs report. The damage estimate is higher than the Treasury Department’s provisional NZ$4 billion forecast because of aftershocks since the initial 7 magnitude temblor rocked Canterbury province on Sept. 4, Philip Borkin, an economist at Goldman Sachs & Partners New Zealand Ltd. in Auckland, said in the e-mailed report.

More than 138,000 damage claims have been lodged with the Earthquake Commission, the government-owned insurer responsible for repairs, ahead of a Dec. 4 deadline. About 3,300 properties are on land that needs to be stabilized, and in some cases protection such as underground retaining walls will be required before rebuilding can start, the government said today.

“For the majority of property owners, the recovery process is relatively straightforward and the repair process can start now,” as long as the commission has assessed their case, Earthquake Recovery Minister Gerry Brownlee said in an e-mailed statement.

For a further 5,500 properties, land damage can be fixed while the building repair is carried out, according to the government report, which mapped about 22,500 sites overall.

Boost to Economy

Rebuilding homes, office buildings and pipelines will boost New Zealand’s economy over the next two years, adding 0.8 percentage point to growth by the third quarter of 2011, when reconstruction is expected to be at a peak, Borkin said. By the end of 2012, gross domestic product will still be 0.4 point higher than in the absence of the earthquake, he said.

Homebuilding and repair is expected to surge 5.1 percent in the year ending June 30, 2011, from a year earlier as the increase in Canterbury rebuilding offsets depressed activity elsewhere, Borkin said. Excluding the earthquake effects, residential construction is forecast to increase 2.1 percent.

Goldman Sachs assumes building and contents damage to about 145,000 homes will cost NZ$2.5 billion. It said the cost to 20,000 non-residential buildings will be NZ$1.4 billion and added an estimated NZ$1 billion for infrastructure repairs.Infrastructure repair is expected to be completed by mid- 2012 and the reconstruction of houses may take until 2014, Borkin said.