Greymouth Evening Star. WEDNESDAY, OCTOBER 15, 1947. The Cost Of A House

Greymouth Evening Star, 15 October 1947, Page 6

Greymouth Evening Star. WEDNESDAY, OCTOBER 15, 1947. The Cost Of A House

A CCORDING to the September issue of the Reserve Bank’s statistical summary, the average value of houses built in 1939 was £lOOO. In 1946 the average was £1540. This year, with increases in the cost of labour and materials the figure is certain to be -higher. Tn addition, the Reserve Bank’s summary does not take cognisance of a very important factor. While the average cost has been increasing sharply, there has been an almost commensurate decrease in the size of the average house. If this factor is taken into consideration it may with confidence be assumed that the cost of building has nearly doubled since 1939.

Under the Land Sales Act, which stabilises ’ values as at December, 1942, houses built in that year or before, are in many cases sold at prices which do not represent their true value in relation to houses built , since 1942. It is undeniable that a house built, say, 10 years ago is often far superior in quality to one of recent construction. If the value of houses built since 1942 were based on the cost of labour and materials in that year —five years ago—it would undoubtedly not be anywhere near the figures at which sa|es of such bouses are made today.

If costs continue to rise—and the indications are that they 'will—then it will be readily seen that the sales position must become even more complex. The intention of the Land Sales Act, to stabilise values at the 1942 level, was from the outset impossible of accomplishment without a similar rigid stabilisation of costs, and, failing that, without giving rise to a large measure of injustice. As the position is, to take one case, an owner may have today to sell at 1942 values a property bought in that year only to find on transfer to another town that lie has to buy a house constructed, say, this year at a price very much higher and yet in quality much lower. In addition there are thousands of people who are today building and buying houses at values very much higher than they were in 1942. By circumstances beyond their control they are being placed in a disadvantageous position. A law that is in some respects unjust and at the same time is often flouted, as is common knowledge, is a law requiring revision. It is obvious that while costs in most other directions have soared house values cannot be held for any length of time at an artificially low level. A scaling up of the basic price to something near true values would go some way towards restoring economic equilibrium and removing injustices and anomalies. The land sales law, particularly as it relates to house properties, requires revision, and the sooner the Government makes a realistic and impartial approach to the problem the better it will be for the community in general. The longer the present position is allowed to continue, the more complex it must become.