An ''over-reaction'' to the Canterbury earthquakes is not helping in the fight to save Dunedin's heritage buildings, new city councillor David Benson-Pope says.
Cr Benson-Pope said the protection of heritage buildings in Dunedin was an ''absolute key'' to the city's future.
He wants more investigation by the council into ways it can help building owners finance earthquake strengthening, perhaps by allowing them to pay for the work through their rates.
Registered valuer Adam Binns said there was a ''quandary'' in Dunedin because property values were lower than other centres but the cost of earthquake strengthening was the same.
He said commercial tenants were very concerned about building safety and that affected demand for a particular building and its occupancy rate.
''The primary factor as to how much a building owner can invest in a building is the rental income that can be derived from that building.''
He said there was no clear view on what was going to happen with old Dunedin buildings that were covered by heritage listings but were uneconomic to fix.
''The rents don't dictate that you can undertake a good refurbishment and earthquake strengthening but you can't knock it over.''
Otago Chamber of Commerce chief executive John Christie said the growing number of vacant buildings in the CBD was a concern for the chamber because it affected the vibrancy of the city.
''As leases are coming up for renewal we are seeing some non-renewals, or reductions in rented space,'' Mr Christie said.
He said some types of commercial buildings in the right locations were in short supply.
Mayor Dave Cull said economic conditions were probably a bigger factor in occupancy rates of buildings and several developers had successfully been taking ''cot case buildings'' and turning them into viable enterprises - particularly in the warehouse district near Queens Gardens.
Real Estate Institute of New Zealand regional director Liz Nidd, of Dunedin, said older buildings that needed earthquake strengthening would have a question mark over them.
''Dunedin is known for the beautiful buildings and I think it is just going to be an absolute tragedy if we do end up with people walking away from buildings and them being demolished.''
She said modern buildings and earthquake strengthened buildings in the right locations ''sold very well and very quickly''.
She used the example of the BNZ building in The Exchange, which was now fully tenanted.
