LAND VALUES

Evening Post, Volume CV, Issue 24, 29 January 1923, Page 8

LAND VALUES

ARE THEY UNDERESTIMATED ?

LONDON MESSAGE DISCUSSED.

The cablegrams relative to a report of the British Empire Exhibition. .Commission, headed by Colonel Belcher, show that the best land in New Zealand was said; to be worth only £30 to £40 per acre. Sir James Alle^n, as High Com- 11 missidher for the Dominion,.resented this valuation, pointing to the fact that the. mission was but a fortnight in New Zea- ■ land. Was the value placed by the Commissioners too low? This question was put by a representative of "The Post" to a gentleman, who has spent a lifetime in the Dominion, in close association with stock and station interests and banking. He remarked that the Commissioners might have been but a fortnight in this country, but that would have been long enough for them to have obtained trustworthy information of la"nd values from those in a position to give it. The speech of Sir George El-" Hot, chairman of the Bank of New Zealand, was pointed to as evidence that the prices of land in New Zealand were too high, and the cause 6f very much of the trouble that farmers were passing through. "Sir George Elliot," it was added.^ "said that during the last ten years 'there has been much wild speculation in land.' He was then speaking at the half-yearly meeting of the bank, in December last. He referred to the; 'unheard of prices' to which land had soared in-New Zealand as the prices of produce, also unheard of, had soared. There were boom prices for produce, and the sequel was boom prices for land. Sir Harold Beauchamp, when chairman of the Bank of New Zealand, had spoken at practically every meeting of the bank, year in year out,on this same subject of land inflation. He had pointed out the danger of basing land values upon then prices for produce, which, aftei? Imperial purchase aij fixed rates had ceased, would fluctuate in common with those lor similar produce in the markets of the world, and would oertainly not be maintained at the Imperial purchase levels. What he foresaw had come to pass, as was only natural. Now the question is, , are the •' Commissioners wrong in stating that the best land in New Zealand is worth only.£3o to £40 per acre? They are not far out if the valuation of the land is based on what it will re-' turn to the farmer after making dtfe provision for all outgoings, his own labour, interest, -rates, taxes, other items of. expenditure that a merchant would certainly take into account in estimating his net profits." A concrete instance was' given of a fine dairying property in the best part of the Manawatu,, which had sold for £110 per acre, and had.passed from the purchaser with the loss of his labour and deposit. He could not make a "do" of it with the price of butter-fat where it was when he went out. With butter-fat at Is 6d per pound—a- fair price (and better, as were cheese and mutton and lamb taday v than before the war), £40 per acre was high enough. More was\ too high, speaking generally. ; ' "In the absence of the report of the Commissioners one cannot do more than suggest that they based their ideas^of values df the best land on what the land would actually return at the then market prices. Land agents' prices for properties are interesting so far as they go; but the real value of farming land is what can be made out of it by intelligentand economical farming. One cannot get away .from that. Farming must be con-' ducted on the same strict lines as any sother business, and full allowances made for outgoings in the form of overhead expenses as in a well conducted business of a different character. When it is so conducted, then it is doubtful if, to-day the average of the best dairying land in the Dominion on a-butter-fat basis of Is 6d per pound is worth much more than £40 per acre." '