HOUSING—INTEREST OR RENT?

Evening Post, Volume CXI, Issue 44, 21 February 1931, Page 6

HOUSING—INTEREST OR RENT?

While 20 per cent, of New Zealand home-dwellers own "unencumbered freehold," over 30 per cent, pay interest (as owners) in some form or other, and over 30 per cent, are tenants paying rent. A good many of the interest-paying owners are in houses built at a time when building cost was high relative to to-day's cost, and relative to the probable cost of building over the next four or five years. If it should turn out that during 1931-35 a home will be buildable at some percentage below the average costs of 1920-30, an interestpaying owner may find that the market price of his home ia below the capital assessment on which he is paying interest. Against this, however, must be set the fact that a homeowner paying under the State Advances scheme is repaying principal and increasing the margin of his' equity in his property, for, even if his annual payments do not decrease, \ there is an increasing proportion of capital-repayment. It does not necessarily follow, therefore, that what may be a temporary fall in capital value warrants a sacrifice of equity. Public policy is to keep owners in their homes, and to mitigate the strain that a long term dwelling-pur-chase system is bound to undergo when assailed by reduced house values on the one hand, and, on the other hand, by diminution of workers' incomes.