Dunedin City Council is lifting the future minimum level of coastal houses by 0.75 metres in response to predictions of climate change.
The council has reassessed Dunedin's coastline using predictions of 0.5 metre of ocean rise and increasingly frequent storm surges over the next 50 years.
The minimum floor height will be an average of 2.9 metres above sea level, and 3.35 metres at Brighton on the city's south coast.
Cr Kate Wilson says the new rules affect only new buildings or house extensions, but will go on the Land Information record for all existing houses, which could reduce their value.
About 1000 homeowners along Dunedin's coast will be affected.
A Karitane resident who built his house right onto a river estuary, Gary Offen, says the risk of flooding is part of living so close to the water.
Mr Offen says there is still plenty of interest in properties like his, so he is not worried by the new restrictions.