PRODUCTIVE VALUE OF LAND

Hokitika Guardian, 15 July 1931, Page 2

PRODUCTIVE VALUE OF LAND

MORTGAGE'S SCRAPPED. SANER PRICE BASIS FOR FARMS. WELLINGTON, July 13. A very interesting position, and a pleasing sanity of outlook on land values, which if generally accepted would, do much to encourage a feeling of security amongst farmers in the Dominion, with a stabilisation of productivity at its fullest extent, are disclosed by the investigations of a resident of the Etl-ham district into a Press Association telegram from Eltham, dated June 29, which read. “A hopeful indication of the expectation of better times is given by the improved demand which exists in the Eltham district for farm properties. Quite fair prices are being obtained,, and buyers are apparently provided with a fair amount of cash. During the past two or three weeks the following farms have been sold : —l4O acres at Mangatoki, at £42 10s per acre; 151 acres at Urenui, at £3B; 51 acres at Eltham, at £4O; a.ttd 4? acres at Eltham, at £45. Substantial ensli deposits were paid by all purchasers.” SOME EXTRA FACTS. , This .message induced an, investigator to ascertain which farms had been sold, and what prices per acre these farms were changing hands at in the boom time, as he felt that much remained' to be said regarding “paper” mortgages and the position of the farmer on the present sale values.

1 He has ascertained that the 140-acre farm at Mangatoki was valued in boom times at £BS per acre (recent sale £42 10s) ; 151 acres at Urenui was formerly mortgaged for £6O an acre (present day sale £38); 51 acres at Eltham, boom price £9O (recent forced sale £46); 47 acres at Eltham, boom price £65 (recent sale £45). In addition to the farms mentioned in the telegram, one at Ngaere, boom price £9O, has changed 1 hands at £43. NEW LEASE BASIS. Prices of leaseholds have also been affected, ■ some actual instances being ’ 45s per acre, based on Is minimum for . butterfat, with 2s 6d up or down for every Id fluctuation in butterfat, 50s on the same basis, and 60s (still considered too much from the farmers’ point of view in relation to production possibilities). The whole goes to show, comments the gentlemeh referred to, that mortgages are being heavily serappedj and that lessees are being met feither by sliding scale or by direct rfc- „ yJuctjpn.'L., if „ similar, reductions ..warfe made by the rest of the community, apart from farmers’ mortgagees, national stabilisation would quickly follow, THE PRODUCTIVE BASIS. “Regarding leaseholds particularly, though the same holds good of farms owned by the farmer,” he said, “the basis of value of land is what it will produce, and: the tendency evidently is for the lessees to> make arrangements with their landlords for a basis rental fixed on the butterfat return of Is per lb., with a sliding scale for butterfat returning more or less than that per pound. The three instances given are actually in operation, so it is fair to assume that they are being adopted to 'some extent elsewhere. ' Tliis spirit is a splendid thing, as it means that with this consideration given to farmers, reconstruction will be considerably extended, and it. is to be hoped that all mortgagees will take the opportunity of completing such arrangements with their mortgagors, and landlords with their lessees, so that the farmers in each instance, instead of being Jeft ‘in the air,’ will have the heart to carry on, and do the best they can for the farm, with the hope of getting something out of it for themselves.

FARMS LET SLIDE. “If the mortgagee is to take every rise in produce—and even to anticipate rises in produce—the mortgagor or lessee, as the case may be, has nothing left. This has been so much the case .that many farms, one might say the majority have not been kept in heart. Manuring and top-dressing have been neglected, and the farm is not .now at its full productive efficiency. If every id is to go to the mortgagee, the farms will stay in that position. “A point that must not be' lost sight of is that a, large number of these mortgages do not represent money lent, but are merely paper profits, the result of speculation in boom times, and in partly scrapping such mortgages, the mortgagee is tearing up a. totalizator ticket on a horse that refused to start. It was a gamble for a. big return on a small outlay, and it had ‘missed.’

“Considered in the light of the colla,-! teral farts the Eltham message is just as cheering as it was intended to be,” concluded the investigator, “though from possibly a slightly different angle. Until land values—and some .• others—are reduced to a. sane workingbb a s, progress towards the 'national reconstruction so necessary in our present straits will be delayed. Tt is perhaps worth mentioning that house rents are down in Eltham. The sooner that the prices of essential household commodities clothing and other needs of the wage-earner fall into line with the ineritnble decrease in property values, town and country, the sooner will contented workers, cheerfully undertake their own reconstruction problems on the new basis. J