Loan Revision Asked For

Press, Volume CVI, Issue 31168, 19 September 1966, Page 20

Loan Revision Asked For

The time is “more than ripe” for a general revision in State Advances Corporation loan levels for private housing, says the latest issue of the New Zealand Timber Journal. The journal is the official publication of the New Zealand Timber Merchants’ Federation, the New Zealand Joinery Manufacturers' Federation. the New Zealand Wood Preservers’ Association and the New Zealand Timber Importers’ Association. “Since 1959. the State Advances Corporation's loan maximum (except in special circumstances) has been fixed at £2500,’’ the journal says in an editorial. “If this figure was realistic, which is open to argument, there are strong indications that this is not the case today. “S.A.C. policy is a major controlling factor in the building of private houses. A policy which is not attuned to current conditions must operate in the restriction of urgently-needed housing. “Corporation policy says that families with five or more children may borrow up to £2650, and families with unencumbered sections can obtain up to £2850,” the Journal says. "These loans, with interest rebated to 3 per cent, are

granted to families whose inicoine is not over £lOOO yearly, plus £5O for each dependent child. Loans not eligible for the rebate are at 5 per cent. "Average earnings, which have scarcely matched average expenditures, have risen sharply since 1959. The rise, which would include overtime, bonuses and allowances, has been computed as something over 38 per cent. “In other words, the average male worker today earns something over £lOOO a year. This would compare with an average figure in 1959 of £795.” The Timber Journal says' that in 1959 the average male; worker would have had no | difficulty in obtaining a rebated loan for housing, where-! as today he would be, at best.j a borderline case. “In 1960, three-quarters of the housing loans granted by the corporation were of the 3 per cent rebated variety: in 1965. such loans amounted to 48 per cent of total loans granted. “In the year ended March 31 last, only 41.8 per cent of applications approved by the S.A.C. were at the lower interest rate.” The journal says that the income of prospective homeseekers is at least £l2OO, with a net disposable income of some £lO6O. On the adjusted 1959 figure, this latter figure would be £740. “Housing costs have climbed with rising wages,” the editorial adds. “A house

of 1100 square feet at WelJington, which in 1959 cost £3410, now is £3,983 to build. “Christchurch figures are £2793 and £3190 respectively A Wellington section, which, seven years ago, cost £750, is now £ll5O. “Both incomes and house prices have risen sharply since 1959. At Wellington alone, the house-plus-section price has gone up by nearly 24 per cent. Only the S.A.C. loan limit has remained unchanged.”