LAND VALUES

Press, Volume CXV, Issue 33964, 3 October 1975, Page 7

LAND VALUES

Scarcity of mortgage money, high interest rates, and the clouded outlook for farming have taken the heat out of the rural land market. In making this observation of the 1974-1975 season, the ’“Annual Review” of Pyne, Gould, Guinness Ltd, says that since October last year rural land has come back in value by about 10 per cent on the sometimes unrealistic levels it reached at the height of the boom in the earlier months of 1974.

The review says that properties involving large capital commitments have been reasonably saleable, provided prices are moderate. Buyers for this relatively restricted type of property were frequently city businessmen who considered land a good longterm investment.

Some inquiry came from farmers whose properties had been swallowed up in the urban sprawl, and as prices for this class of land had been high, finance had usually not been a worry for owners wishing to move.

“The urban sprawl has certainly worried those people who are alarmed at the encroachment of housing on good, productive farmland. Many local bodies have tightened their requirements for subdivision of land near towns, with the result that the popular five to 20-acre blocks, bought to provide simulated country living

for town-dwellers, have become very scarce. “Any such land available continues to be dear, and is tending to rise. “For the general run of farms of average size, the inquiry is restricted largely to farmers who have sold one property to move to another. In such cases, finance is not normally a pressing consideration. “For a young man with limited resources wanting to start farming, finance is very definitely a pressing difficulty, and his chances currently of being financed into land are even more daunting than they have almost always been.” The review says that in an entirely different sense, prospective farm purchasers with adequate finance are worried by the present situation. They must decide whether to buy now, or wait for signs of an upturn and in the meantime let out their capital at the exceedingly attractive rates available for even shortterm accommodation. “It may turn out that this is the time to buy,” the review comments. The review adds that in the longer term, farming must return to its traditional strength. The worry for the prospective purchaser with money out at interest in the city was when it would do so. In the meantime, the scarcity of loan money, rather than the very high price of land, was restricting trade in rural land.