URBAN PROPERTY VALUES

Press, Volume LXXXVI, Issue 26265, 9 November 1950, Page 3

URBAN PROPERTY VALUES

“SETTLING DOWN AFTER EARLY FLURRY”

VIEWS OF REAL ESTATE PRESIDENT ’

The upward movement in prices of urban property since the relaxation of Land Valuation Court control was discussed by the president (Mr R. A. Collie) iri his report to the annual meeting of the Canterbury-Westland branch of the Real Estate Institute of New Zeeland. There were three observations that could be made on the assertion that property values had risen beyond reason, said Mr Collie. First no one knew before what the actual price paid really was. Second, houses and sections were now available to purchasers whereas previously they were not. Third, the rise in property values was only in line with the rise in the price of other commodities and in relation to the real value of the £1 note.

“Before the election of the National Government, urban property owners, knowing that it was almost certain that controls would be lifted, declined to dispose of their holdings, consequently business was more or less at a standstill,” said Mr Collie. “This state of affairs continued until legislation was brought down, freeing urban properties entirely from the control of the Land Valuation Court. Properties immediately became available and sold readily to a hungry market. Naturally, prices obtained were greatlv beyond 1942 values, but in a majority of cases when analysed, represented present-day replacement costs less depreciation, plus locality value and a degree of shortage value, together with the fact that the sections really attained their true value,” he continued. “The owner of an older, well-constructed dwelling built of best materials received more its true value. Of course there were instances of bu; - ers. desirous of obtaining position, together with vacant possession, having to compete with others at auction. The prices soared somewhat in these cases and gave rise to much comment, but as the year progressed and the first flurry was over, it became evident that the market was settling down. “Mortgagees, with the exception of insurance companies, are insisting on very nearly a half margin for their security. This is having a stabilising effect and helping to keep prices down to a reasonable basis. Insurance companies have given a greater margm, together with a life policy on the purchaser, thus assisting those with smaller cash deposits to obtain a home. Suspensory Loan “The Government, in granting the suspensory loan, conferred a benefit on a certain class of the community," continued Mr Collie, “the reason being primarily to encourage building, bui we feel that something further could be done to assist the family man to acquire his own home. There are who cannot afford more than £l2OO to £l6OO, and this section of the community, who really desire to have a stake in the country, should have some help extended to them in the purchase of the older-type dwelling.

“Tenanted dwellings have not been selling very readily unless showing a good return as an investment and numerous instances have occurred of tenanted property being sold below the rating valuation," he said. "Building sections have been coming on the market more readily and owners who have been holding blocks of land for many years are subdividing and giving young people the opportunity of building a home of their own and perhaps taking advantage of Government assistance through the State Advances Corporation. "It does not seem reasonable to suppose that farm prices will soar to ridiculous heights, as some imagine, because the farm purchaser knows that with the value of stock so high and a certain amount of doubt as to the high price for produce continuing he must be careful and keep his negotiations within reasonable bounds," uL- > M . r Coll i e - commenting on recent property" relatlng to the sa,e of farm

We do appreciate the work done by the National Government in handling the very sticky problem that faced them in the control of sale of rural and urban properties and commend them for their policy of freedom in all things, which after all is only British,’ concluded Mr Collie