Residential reconstruction following the devastating Canterbury earthquakes is half-complete, according to a Westpac New Zealand economic update.

It says about 69,000 homes had claims for damage below the $NZ100,000 ($88,300) cap covered by the government-owned Earthquake Commission.

Another 24,000 houses required major repairs or rebuilding following the quake series that began in September 2010.

The under-cap program is 97% complete, and insurers have finished 3400 major repairs or rebuilds.

The Insurance Council of New Zealand says although the figure suggests insurance work is slow, 61% of claims are settled.

A spokesman told insuranceNEWS.com.au 3457 rebuilds and repair jobs have been completed and 11,220 claims cash-settled. Another 2536 have been resolved, meaning they are in construction, consenting or under contract.

“This takes the completed or resolved [claims] to 72%,” she said.

Westpac expects construction to wind down from the middle of next year. The rebuild has lifted New Zealand’s gross domestic product, but the report says it has also pushed up costs in the housing and construction sector and reduced the scope for interest rate cuts.

“The rebuild crowded out economic activity that would have otherwise occurred,” Westpac says.