HOUSES IN HAWERA

Hawera Star, Volume XLVIII, 19 January 1925, Page 4

HOUSES IN HAWERA

WHY PEOPLE WON’T BUILD. CHEAPER TO RENT THAN TO ERECT. The steady progress of Hawera is indicated by the fact that last year building permits to the extent of £26,898 were granted. A regrettable feature of the building operations for which the permits were granted, however, is that very few additional dwellings have been erected. This is accounted for by the fact that men with money to invest do not feel disposed to erect houses with a view to letting them. Of course, this has been the case all. over the Dominion for some years past, and is attributed to the high cost of materials and labour. In former days a man would invest in house property when a house which would now cost from £IOOO t,o £I2OO could he purchased for about £500.. At a reasonable rental he could rely on getting 10 per cent, on his money, but nowadays a house costing from £IOOO to £I2OO and let at, sav, 30s a week, would, not give anything like the same return.

One property owner informed a Star reporter to-day that a man who built a house nowadays with a view to letting it was simply putting a mill-stone round his neck. The Five-roomed Dwelling.

A gentleman with an intimate knowledge of the building trade and conditions in Hawera was approached by a Star reporter as to the reason for the general reluctance of people to invest in house property, and lie had some interesting comments to make. “The position,” he said, “is simply that it is not at all an attractive investment for a man to put his money into house propery at the present time. It- is simply hopeless, and so far as I am concerned, I would not put sixpence into house property. A man requires at least 10 per cent, on his investment to cover the cost of re-painting, insurance, repairs, etc., and then to leave a cl.e-ar 6 per cent. Take, for instance, the case of a five-roomed house, which the average working man would require. “Sections Too Dear.”

“Sections in Hawera, to begin with, are too dear. You cannot get a quarteracre section in the borough for less than £3OO. Borough leases, I fancy, averaged something like £ls a year, but I believe they have since been revised, though some went up from £lB to £24. Now .let us take £3OO as the basis for the .section. A five-roomed house, with every convenience —which nowadays everyone insists upon —would cost erected in good timber about £BSO to £9OO. That means a capital outlay of £I2OO, including section, paths, fencing, etc. Ten per cent, on that would be £l2O a year. Borough rates would he approximately £6 ana insurance £3 ner annum.

“That brings the amount up to £129 a year, or £2 10s a week. A man would have to get, therefore, £2 10s a week for a five-roomed house, so that the proposition from an investor’s point of view is hopeless. The average working man could never afford to pay it. Rent used to be calculated on the basis of a day and a half’s pay — two days’ at the outside. Taking £4 10s ns the' average wage, this would mean that the wage-earner could pny on an average 22s Gd a week. .‘‘The life of a house built of ordinary building timber_is 14 to 20 years. At the most a man who builds a fiveroomed house should not pay more than £IOO for his section, but at present people find it more economical to rent than to build. Timber Prices. ■

“The added cost is accounted for greatly by the high price of timber. In a house of the description J have given the timber would cost’ about £400,whereas some years ago it could be purchased for about £l5O. There does not appear to be any likelihood of a decrease; in fact there have been two increases in the pasf year.”