HOUSE SHORTAGE

Evening Post, Volume CXXX, Issue 121, 18 November 1940, Page 10

HOUSE SHORTAGE

BARS TO BUILDING

DISCOURAGED INVESTMENT

"Evening Post," November 18

Some light on the subject of acute shortage of dwelling houses in Sydney and elsewhere was thrown by Mr. F. N. Yarwood, chairman of the Permanent Trustee Company of New South Wales, Ltd., Sydney. What he had to 'say to shareholders of his company possesses, some interest for New Zealand, where there is also a shortage of dwellings, especially in and near the main centres —a shortage not yet made good for all the Government's enterprise and activity. Mr. Yarwood referred specifically to the effects of the New South Wales Moratorium Law, which had been passed and re-enacted several times now. "Through the experience and observations afforded by the business of a trustee company," he said, "one has a fair chance to see how the law has worked out, and there can be no doubt that iittie or no benefit has been derived by the .community generally from legislation of this description. True it is that some people thereby escaped their legitimate liabilities; but that the measure has been one for the general benefit and advantage of the community, no!

"Parliament should, as far as possible, avoid interfering with private contracts and passing Acts which at.tempt to amend the situation satisfac;torily, instead of leaving it to individuals to deal with personally. The same thing applies to retrospective legislation. "As regards the moratorium —take the case of small house property. The law now practically controls what return the investors may be allowed to get (if they can), and, at the instigation of complainants, it interferes very considerably with the situation as far as the landlord and mortgagee are concerned.

"What does this do? It deals possibly with isolated cases where trouble has arisen, but at the same time freezes any further investment in this direction; consequently there then becomes a shortage of houses, and, in the last state, the man who wants to rent and not to buy in a certain district becomes a complainant that he cannot get what he wants—this, instead of allowing the law of supply and demand to operate. "Legislators, sometimes with only a limited experience, talk about the cupidity of capital and proceed then to clamour for legislation which makes it almost impossible for the investor to operate. , "If they only knew it, the effect of this legislation is generally to increase unemployment. The community is wise that leaves borrowers and lenders to settle their troubles 'inter se,' and does not assume that all the virtues are on one side and all the vices on the other. The Moratorium Act has caused many an unfortunate lender to suffer where there was no justification whatever for so doing."