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Authorities are evacuating residents from earthquake-hit Christchurch as New Zealand prime minister John Key visits the city to assess the damage.

Mr Key travelled to Christchurch with civil defence minister John Carter after the 7.0 magnitude earthquake rocked the country's second largest city early this morning.

A state of emergency has been declared in the and the Selwyn District, and the area was shaken by aftershocks.

Building facades have collapsed, cars have been crushed and many homes have suffered damage after the quake hit. Water, power and sewerage are also affected and the airport is closed.

Mr Carter says residents will be evacuated from Christchurch for their own safety, adding the dangers of falling masonry are considered serious enough to take the measure.

Police say there are some reports of lootings and they have made several arrests.

Christchurch Hospital says no-one has been killed, but two people have been seriously injured and many others have also suffered some injuries, including broken bones and cuts.

Civil defence director John Hamilton told Radio New Zealand the priority now is to get water supplies to people.

He says it could take days or even weeks to get the city's water and sewerage facilities fixed.

"I would expect us to be able to source trucks or milk tankers for example and set up distribution points at locations around the city," Mr Hamilton said.

"Then asking residents to take their water container to the distribution point to get a ration of water because there won't be a lot for everybody and allow that for drinking and cooking basically."

The New Zealand army is preparing to send troops to assist in Christchurch if required.

Christchurch mayor Bob Parker says infrastructure checks are underway and he is urging people to conserve water and stay off the roads.

"[It was] just a tremendous release of energy ... just 30 kilometres away from the centre of Christchurch," he said.

"Given that and given the scale of the earthquake, the damage which is very, very significant in terms of cracks in buildings. There will need to be a lot of inspection.

"People do need to take care and they do need to be conscious of the danger of aftershocks."

Mr Parker says people should use their common sense.

"Emergency services are flat out at the moment. The assessment is underway. Take sensible precautions but don't go out sight-seeing, check on your neighbours," he said.

"Do the things that communities do so well at times like this."

'Unbelievable'

Resident Susannah Symonds says she has felt about 50 aftershocks.

"It lasted a good, probably, maybe, 15, 20 seconds and we couldn't see where we were going," she said.

"Things were just falling over on the floor. It was just unbelievable. It was the most scariest thing I've ever experienced."

Frances Adank, who lives in the Christchurch suburb of St Albans, says water is bubbling up through the ground.

"The scale of it is quite astonishing out here," he said.

"The city council I think is going to be working for days to get the water mains sorted out. It just looks to me like all the water mains - there's loads of water mains that have broken because there's sand bubbling, like there's sandcastles all over our front lawn in St Alban's and it's pouring towards the gutters and there's just water pouring out of every front section."

Dr Sebastian Koga, a neurosurgeon at Christchurch Hospital, says the city was in darkness.

"All the lights went out," he said.

"Sirens were sounding and I came to check on our patients and to help in the trauma bay."

Christchurch's Lyttelton Port chief executive officer Peter Davie says there has been damage to the wharf and he estimates the repair costs will be in the millions.

"We've got to do a full assessment of it now. We're going to get people underneath and have a good look but there's been quite a bit of movement," he said.

"It looks like the port will be operational but quite a bit of damage with it."

Mount Hutt avalanches

The destructive earthquake also caused some avalanches on the Mount Hutt ski field, which is popular with Australian holidaymakers.

The ski area manager, David Wilson, says they are assessing the infrastructure to decide whether or not to open the ski field.

Meanwhile, Geoscience Australia says the earthquake is not likely to have any impact on Australia.

Seismologist Steve Tatham says the measuring instruments felt the impact of the earthquake here, but there is no further threat or tsunami warning.

"In this case being on the east coast of New Zealand the actual south island of New Zealand if you think about it would shield Australia," he said.

"So if there to be any disturbance of the ocean floor the tsunami would travel out in to the Pacific and any affects on Australia would be minimal."