BRAKE ON INFLATION

Dominion, Volume 37, Issue 120, 16 February 1944, Page 6

BRAKE ON INFLATION

Effect Of Land Sales Act On Values “Up to the time of the passing of the Land Sales Act there was evident a great deal of activity in the real estate market and the policy of your directors enabled many to complete the purchase of a home on term? agreeable to borrower and lender alike,” said Mr. William Watson, chairman of directors of the Wellington Trust, Loan and Investment Company, in his address, which was read at the company’s annual meeting yesterday by Dr. C. Prendergast Knight, who presided in the absence of Mr. Watson.

Since the passing of the Land Sales Act there has been a slackening of the volume of business available and while no doubt this may be attributable to the operation of the Act there are also Other contributing factors,” continued the address. “It is. however, still too early to express any considered opinion of the impact of the Land Sales Act on our business, but confining my remarks to the Act as it affects city and suburban areas I should say that having regard to the ideal of the greatest good to the greatest number the limiting of values to reasonable limits is in the best interest of all. I am certain that uncontrolled property values would lead eventually to the distress of many who, because they are forced by circumstances to purchase homes at what might seem ridiculous figures. would probably in later years be in difficulty. It seems to me that any reasonable measures to avert such a calamity is a step in the right direction. “No one wishes to. experience another collapse in the mortgage investment mans ket such as occurred in the depression, and therefore I have no hesitation in saying that rising prices for residential properties were running directly counter to all efforts to enforce anti-inflationary policies and contained the seeds of future deflation with the threat of loss of homes by the home-owning public, loss of investments by lending institutions and heavier obligations for the Government. In this connexion our policy with prospective borne buyers has been to obtain reasonably conservative valuations, and to grant Joans requiring regular monthly payments against principal "The recent announcement of a survey of industry to determine the ability of manufacturers and the construction industry to resume home building operations promptly after the war is to be commended. I trust that together with this appreciation of the position, the Government will permit institutions such as this, increased facilities for participation in the development of Hie building industry in the post-war period.”