PLENTY OF MONEY

Evening Star, Issue 20029, 21 November 1928, Page 10

PLENTY OF MONEY

BUT INTEREST RATE STILL S}-%

[SnsciAU to tub * Star,’]

CHRISTCHURCH, November 20,

Rumours have been current that money would bo avilablo in Christchurch on first mortgages at tho rato of interest of 6 per cent., instead of 6J per cent., as has generally boon the case. Investigations to-day showed, however, that, although plenty of money is now available, it is not likely, at any rate for some time to come, that it will be any more cheaply obtainable than it has been in the past.

Knowing of one instance in which a man had fixed up a loan of £l,lOO at 6 per cent., a ‘Sun’ reporter visited leading legal linns and building societies, seeking to discover whether money was loosening up and getting easier. The opinions he received were interesting, and showed some differences, though in tho main they agreed. “Wo have been letting out at fi per cent, on good rural security for a considerable time,” said the principal of one of the largest and oldest-established legal firms in the city,- “It has been 6 "per cent, there for tho most part, and 6J- per cent, on suburban security. In tho North Island interest rates have always been from -J- to 1 per cent, higher thanours. Here wo have let out for 6 per cent, on good suburban security, too. Building societies keep at G.)- and 7 per cent, on tho scale, but their clients are always reducing loans payable by instalments. There undoubtedly is money about now, if tho security is good. In tho case of stock and station agents, for example, there is any amount of money available on good security. Altogether, tho tone is, in my opinion, much more hopeful. I’eoplc are retrenching, and wool and dairy produce are very much brighter. The local traders felt the pinch of spending, but it was not an uiuiiixcd evil, for in taking care with spending they have boon consolidating their position. Of course, it has been hard on the retailers while it lasted. The fact that interest is falling shows that there is a demand for first-class shares, producing'a high rate. Things are very much more solid than they have been, and I firmly beliovcthat wo arc round tho comer, though it is not a time for lavish expenditure yet.” A member of another big legal firm did not think that there tv ns any indication that money generally was coming clown to 6 per cent., though in sonic eases it might he so. It depended on two things—first, tho amount of the loan required; and, second, tho seen rit.y offering. “At tho present time there is a tendency to prefer city property to farm lands,” he continued. “This is quite contrary to the position n short time ago, when farm land security was preferred to city security. My opinion is that the rale of (U per cent, will bo maintained for some little time.”

The secretary of an investment society agreed that there was no suggestion of alteration in interest rates. There was, however, quite a lot of money available. There was also an easier feeling prevalent, but bo would not put too much reliance on that, for the wish might bo the father of the thought. In his own business the rate was 7 per cent., but building society rates bad always been reckoned as ] per cent, higher than ordinary rates. Generally speaking, there was now no shortage of money, and a good demand for it. “ Whether in the I‘utnro tho average normal rato will drop, as you suggest, from (*>.} per cent, to 6 per cent, is more than 1 can tell you. It certainly has not done so yet.”