THE UNPOPULAR MORTGAGE.

Auckland Star, Volume LVI, Issue 65, 18 March 1925, Page 4

THE UNPOPULAR MORTGAGE.

In tlie insurance statistics for 1023 just issued by the Government there is striking proof of the unpopularity o* mortgages as an investment. The assets of the various fire offices are given for a j period of four years. Tbe total of assets jin 1919 was £3,870.085. but in 1923 it was I an enormous increase. The item showing tbe largest increase is "ordinary" Government securities, which rose from £24(1,100 to £1,428,250. War loan investment increased from £1,391,808 to £1,075,155, but local body securities more than doubled. Mortgages, however, declined from £71.1.004 to £3.10,287. This decline in mortgage investment in a period when insurance assets increased so greatly is very significant. The Government Statistician attributes the unpopularity of mortgages and the popularity of Government securities "to the incidence of taxation of interest from mortgages operating on a sliding scale, whilst the other forms of income are taxed on a fixed scale anil are capable of estimation." He also attributes th.c increase for 1023 in insurance investments in public securities to the entry into the Xew Zealand field of another English company. Thorp are however, other potent reasons for tbe falling off in mortgage investments. One is the uncertainty about land values and the other the shock that investors' confidence has suffered through the Government's reckless interference with contracts and general ineptitude in dealing with finance. The moratorium, ami especially its prolongation, lias done more to frighten money away from land than anything else, and it will be long before confidence is fully restored.