HOUSE-BUILDING RISKS

Evening Post, Volume CIX, Issue 115, 17 May 1930, Page 8

HOUSE-BUILDING RISKS

Rents are down in Sydney, and many dwellings are untenanted. If house-renters have paid the piper in the past, they are now calling the tune. "The Post's" Sydney correspondent, in conveying these facts, mentions, that capital is severely hit by the depression. At this there will be no tears shed in anti-capitalist camps. But is it altogether a matter for rejoicing? It would not be in New Zealand. Here it is popular in politics to offer the head of the landlord on a charger. He is represented as wealthy and grasping. This is not true in its general application. Many owners of house property are no more wealthy than their tenants. They have built or bought at prices which must involve them in loss if rent reductions are heavy. There is, however, another aspect of the matter which should not be overlooked. The Government (through its State and Workers' Advances) is little different from a landlord. It receives instalments of principal and interest instead of rent, but if rents fall so mucK that it pays Advances owners to lose their equity and pay a rent which is less than their instalments the Government will be involved. In Sydney the fall has come suddenly. Builders and owners have been caught. Here there may be a similar movement,,though it is unlikely to be so swift or so extensive. It/behoves the Government, however, to take warning and to keep a steadying hand on advances. As we have pointed out previously, there is not a sufficient margin between borrowing and lending rates to cover any unusual risks.