REAL ESTATE

Evening Star, Issue 19550, 7 May 1927, Page 3

REAL ESTATE

INSTITUTE'S ANNUAL MEETING The annual meeting of the Real Estate Institute of , Otago was field yesterday afternoon in Mr R. Hanning’s office. The president (Mr L, Deans Ritchie) was in the chair. CHAIRMAN’S ADDRESS.

The Chairman, in moving the adoption of the annual report and balancesheet, said: — ; ' ' “ The term under review can be regarded as a thoroughly'successful one. Our membership has increased _ .considerably, and the financial position is thoroughly sound, though it has to be remembered that the entrance fees of new members have a bearing on this. “ Business since onr last annual meeting has been good, and although there is something of a lull at present, which is not singular to Otago, I have sufficient faith in Dunedin to feel that its proverbial reputation for financial stability will emerge unimpaired from any temporary quietness. The price of real estate has declined a little from the figure ruling in the boom period a few years ago, hut that it only to be expected. The chief cause for alarm, in my opinion, is the tremendous, and I almost feel, excessive borrowing by the State. Though perhaps the hulk of the money so borrowed is being spent in the dominion and more or less of it may ultimately be re-venue-producing, the interest bill ha' to be met, and this interest for money borrowed overseas, added to our imports, makes a tremendous total to pay from the receipts from primary products, the price for which in some cases is certainly not all that could be desired.

“A loan of £6,000,000 seems to bo regarded with less concern to-day than did one for a sixth of the amount a few years ago, though at 5 per cent, it means an annual interest payment of £300,000, or say £6,000 per According to the Year Rook, the gross indebtedness of this country in 1920 was £201.170,000, while in 1926 it was £238,855,000, an increase of over £37,500,000, which in itself means an annual interest charge of one and three-quarter millions, or £36,000 per week more than in 1920. A certain amount of borrowing is, of course, necessary, but excessive borrowing by the State seems to set an example that local authorities, and even private individuals, are apt to follow, and when a halt has inevitably to be made it will spell serious depression. “ Reference to the money market is made in the annual report, and I can only repeat that if a reasonable volume of business is to he transacted, then money at reasonable rates must bo forthcoming to finance it. It is pleasant reading to notice within the last few days that in the balance-sheet of the Dunedin Savings Bank the amount secured on mortgages amounts to’ £868,930, while Government and local body debentures amount to only £460,402. In many lending institutions the investments on mortgage are very small compared to those on debentures. It will probably be found that quite a large portion of the Savings Bank mortgage investments are on the homes of the people of this city and suburbs, these people in turn having been regular depositors in the bank, and have thus accumulated -sufficient wherewith to launch out on the purchase of a house. j “The last topic naturally leads to the question of housing, and it is interesting to note that once again a j Housing Committee has been formed | in Dunedin, and is busy considering i ways and means of tackling this very | difficult problem. It has formulated certain plans which I hope will prove entirely successful. The personnel of the committee is such that one can feel hopeful that it will achieve success. The house shortage is not so acute as it was some years ago, nevertheless There is still scope for a scheme that will give hotter housing to some people and enable others to acquire a home of their own, who, in ihe ordinary way, could not hope to do so. It is undoubted that congenial home surroundings and a stake in the country, oven to the ownership of one’s home, is an excellent antidote_ to doctrines sometimes heard which are neither conducive to good citizenship nor in harmony with the true British spirit. Some years ago I briefly propounded a housing scheme which was discussed with more or less interest in certain quarters, and with all diffidence I again suggest that this city is quite able to finance a scheme of its own without leaning on the Government, as is the custom of so many people. I then said if a scheme was promulgated it should he in the direction of providing suitable and comfortable houses for those least able to finance the purchase of a property, provided such people were of thrifty and. industrious habits. In the ordinary way the purchase of a home presupposed the ability to pay a comparatively substantial sum as a deposit, but there are many deserving peop'ie in our midst who, -while they have been unable owing to the expense of rearing a family or other causes to save from _ a comparatively small income a sufficient deposit for a home, could pay a weekly payment to cover principal and interest. Such payments would gradually repay the loan from the Housing Committee, and would provide a continuous fund with which to finance others who desire to secure a home of their own. Part of the money for each home would boraised on first mortgage in the ordinary way, and in some cases something might be forthcoming from the purchaser, and all the Housing Committee would need to find would be a fund to finance the balances in the form of second mortgages. _ “ Such organisations as the Housing Committee, Chamber of Commerce, Trades and Labor Council, Employers’ and Manufacturers’_ Associations, etc., could surely accomplish such a task. In the event of the sale of one of the properties so financed the second mortgage would be repayable unless, in the opinion of the Housing Committee, the circumstances of the purchaser gave him the right to take over the existing mortgage. If proper discretion were used both in the selection of purchasers and as to tho type of house, not only do I think there would be no loss on the fund, but that some return in the shape of interest would be forthcoming, while the greatest dividend of all would lie in the fact that the scheme is calculated to make better and_ happier citizens of all concerned.

“ There has been a great deal of discussion lately on the matter of rates, and a good many of the letters appearing seem to lead to no very definite basis. Real estate has increased a good deal in value during the last, few years, so it is not unnatural that the rates on a property have increased over that period. If any fault is to be found, it perhaps lies in the fact, if it be a fact, that all places are not valued on an equal basis, those properties that have been built or sold recently being rated on present values, while those that have not changed bands or been let have remained more or less stationary. . In any case, it is not always an easy matter to value for rating purposes and at the same time preserve equality. For instance, a case came under my notice some years ago where two similar attached houses -were sold at £750 each. About that time the pronounced rise, in rents occurred, and the city valuer was faced with the fact that one of these houses was occupied by the owner, while the other was let at 60s a week. If it were possible to inaugurate a scheme (with suitable safeguards) under which the owner, and not the city valuer would act as the valuer for rating purposes, and the City Council had the right to buy at the owner’s valuation with a view to reselling, -any profit to, remain the property.

of the council, tho results would be distinctly interesting _ This fact remains: that the corporation requires a certain amount of money to pursue its activities, and as long as all property is valued on an equal basis it does not really matter whether valuations are hi ah or low, tho amount of rates in the £ must be adjusted accordingly, in accordance with the income required. “ As stated in the annual report, the outstanding event of the year from the Real Estate Institute point of view has, of course, been the first examination. About 100 candidates sat throughout New Zealand, sixteen _ of these being from Dunedin, Notwithstanding the fact that the examination was perhaps more difficult than was anticipated, the results were wonderfully good, while the knowledge gained must prove of great benefit not only to the real estate agent himself, but to his clients. For the next examination to be held in September of this year the evllabus remains much ;he same, tho chief addition being tlje provision for questions on the recent Town Planning Bill. The first paper of two hours will be on the Land Agents Act and regulations thereunder, with questions of a nature to test the candidates’ ability to apply the Act to given facts and to test his knowledge of the decided cases on the interpretation of the Act. Questions on the rights and duties of land agents can also be embodied in this paper. The second paper —time three hours—will be much tho same as last lime, which was on agreements for sale and purchase, arrangements of tenancies, and the completing of various agreements from certain stated facts, also simple questions on various land 'tenlires, _ mortgages, and stamp duties. Definitions Oi various terms such as tenants in common, Joint tenants, life tenants, equity of redemption, easements, etc., were also asked. The third paper of three hours will embrace subdivisions and general questions on tlie procedure to be adopted in the subdivision of city and country lands, and methods employed either by valuation or arbitration in the fixing of rentals of land or premises. The candidate may also be asked to set out from a given set of brief facts his advice to a client residing at a distance on a matter or matters connected with the real estate business. The Town Planning Act is also covered by this paper.

“ 1 would like to stress the fact, that candidates for this examination are not confined to employers, but employees

in''the real estate business are equally welcome. Entry form and copies of the syllabus are now available. “I cannot conclude without expressing not only the thanks of our members hut my personal thanks to Mr Hanning, our esteemed secretary, for his work through the term.” The motion was seconded by Mr E. J. Bryant. Mr J. B. Waters said that if they looked back a few years before the formation of the institute they would see that considerable progress had been made. He thought there should be some scheme whereby deserving people could own their own houses without the big handicap of having to pay £IOO deposit. With regard to public finances he said they would be glad to Ijear a reference made to a desire for economy. New Zealand had had an exceedingly good run for a number of years past, but it was quite certain they bad reached a stage when they could not expect higher prices for primary foods. Continuing, he said that a person could only save himself by working harder and practising economy. They should certainly economise, and endeavor to see that those with whom they were associated got some-support in their attempts to economise. The motion was carried. OFFICE-BEARERS. Office-bearers were elected as follows President, Mr L. Deans Ritchie; vice-presidents, Messrs A. F. Quelch and T. Scurr; committee—Messrs Douglas, M. Speeding, J. B. Waters, and H. L. Young; auditor, Mr C. Russell Smith.