RISING VALUES.

Auckland Star, Volume LXVIII, Issue 5, 7 January 1937, Page 7

RISING VALUES.

FARMS AND HOUSES LOANS 'EXTENSIONS.'. MORTGAGE READJUSTMENT. WRITING DOWN PROSPECTS. The approaching adjustment of mortgages is awaited with various feelings in the city and province, according to the position of people as mortgagees or mortgagors, - lenders or borrowers, on houses or farms, "but in well-informed circles the general opinion appears to be that only a small proportion of the total of mortgages will be dealt with by writing down. An extension of the loans, without change in the amount; is regarded as virtually certain in. all but. a. minority of cases. This, it is considered, would provide the most equitable and satisfactory-solution.-.

Among lending institutions or private mortgagees there is little apparent desire at the present, time to call up mortgage moneys.' Oh the contrary; where houses .or farm properties are adequate security to cover the amount of money invested, the disposition is to leave the investment undisturbed, .particularly.as the-interest obtainable on sound securities, at the prices ruling on the stock : exchanges to-day,' is below that of ordinary first mortgages.

Over the past 12: months the'mortgage position has.undergone a radical change, and • perhaps nowhere more than in the Auckland district. Here the prosperity of everyone is so. largely bound up with dairying that butter is a governing factor. • ■ A year ago butter was weak on. the market; to-day, though not strong,, its London value is no longer a matter of concern to the daily farmer. He has his guarantee, and is better off than at any time for five or six years.' This'affects the soundness of mortgage money invested in farins, and to.make the , outlook . still brighter wool, an increasing item in Auckland's exports, is now at peak prices. . -. 'Values Coming Back. On the farms,' then, values' are consolidated, and the time for writing off a portion of first mortgages is considered' to.. have passed.. Possibly accumulated arrears of interest may have to be dealt with in some instances, but that is a less complicated problem. Already farmers have been able to. make considerable headway against deferred interest. In", fact, the whole mortgage question, so recently a bogy of. fearsome appearance, has lost most of its terrors.

This is as true of city and suburban property as of rural. : The. shrinking 'and'-'shrivelling process in: real estate has been reversed into a growth and Values, in short, have been coming back. Over the past 12 months ■ the advance ranges from 15 to 23 per J cent in and around Auckland, aud the . movement is continuing /upward. The • j city valuer,' Mr. P. F. Notley, stated today that, the increase in building costs had been forcing up the general level, and'he put the increase,'conservatively,' at •10 per cent for the past 12 months, ■ but a figure of 20 per .cent might be nearer the -mark in some districts. • City Annual Rateable Values. -,-•' • ; To indicate the trend of city values over the past few years Mr. Notley gave • the following figures, which reveal that the turning point occurred about three years ago:— ■ '..-■ ; :.. ..... •-..- ■ .-. t 1 ' 1931 : 2.745.207 1U32 2,070,400 - 1933 2,534,520 ' 1034 2,4117,133 • 1033 .. . 2,479,027- ■ ■- 1030 2,510,535 I , "We, are keeping our finger .'on the " pulse of values," said Mr. Notley, "and I anticipate an increase in 1937 aboutequal to that of last year." ! These valuations for the cijty. give a more' accurate picture of the trend than the rateable capital ■ values of local . bodies generally. Capital valuations ' follow the market some distance, behind, and do not yet ."clearly reveal a'turning ; point, although one' or two small 1 in- - 1 creases were recorded last year. This 'should be- remembered in reading the 'following comparisons:— , -. •..• j." ' ' VALUATION'S, ±031 AND 1030. > . - .:., Ratable Capital Values. ■ | ••.-.:■ boroughs. - - .- ' . 'V: : ' 1031. „>.. 1030. • ■ .;. .-.,-•-; .-'.:• -.:■■ ■■ a ..-;■; . ■ . s - Auckland City .. 48,300,000 40,500,035 Mount Eden 5,023,000 5,077,755 Mount Albert \ 5,374,000 4,003,81(1 Newmarket' .. 1,038,000 1,020,004 Onehunga ...... 2,092,000' 2,204,805 One Tree Hill ... 3*194,000 3,180,007 Devonport ■- 2.050,0000 • 2,125,542 Takapumr ' ■'.. 2,484,000 ' 1,812,775 i Birkenhead .'..*. 902,000 704,501 > Northcote .;.... 013,000 514.755 1 Otnhuhii 1,200,000 1,283,887New Lynn ...;. ..0.70,000 507,942 TOWN DISTRICTS. -, Ellersiie ..; 749,000 005,742 Papatoetoe 791,000 043,290 Papakyra ... 450.000 300,870 Manurewa 437,000 425,770 Howlck 201,000 225,980 Henderson 282,000 200,041 Glen Eden 279,000 200,803 ROAD DISTRICTS: Mount-Rosktll ... 2,300,000 1,735,371 Mount Wellington 070.00U 511.413 Pananire Township 53.000 0G,305 COUNTIES.. Manukau :.. 5,010.000 4,850.283 Walteniata ••- •• • 4,327,000 4.301.550 : Hearing the 1931 L'evel. Values are stilrtelow the 1.931 level, . though considerably above last year's figures, but just how far belo\v_ it is difficult to say. One estimate given this morning was 10 per cent. As..this. - .is '. much less than the equity which nearly; all borrowers have in their follows that most mortgages are to-day , well secured, and, that, except in a few cases, the liabilities do not exceed the 'value of properties. "' ' '.'■■".; At the present rate of progress the 1031 level should be reached within a' short time, possibly this year.': 'A* leading land agent in the city said to-day that 1937 would be a record building year. More money was seeking an out- ' let in house properly, mortgages were returning to favour, and the acute short- .-! age of 'houses' was compelling many people to build.- These developments, he I said, had not been overlooked by exist--1 ih'g' mortgagees, and he' predicted that I there would be little calling up of loans due. Also, he thought, there would be little reducing of principals, and interest rates could not be expected' to come below the lever of 41 per cent for best j mortgages. On old buildings some off was to be looked, for, but this should not have a disturbing effect; '■ it was necessary, in fact long overdue. Modern or well-maintained houses and > flats were in a different category. They . i were paying their way,'and the demand : for houses to.rent was increasing.. Per- • haps several years would ' pass before • the shortage was overcome, and in the meantime property-values could bo ex- . 'fected to make a continuous advance.