DROP IN LAND VALUES

New Zealand Times, Volume XXXI, Issue 6823, 20 May 1909, Page 6

DROP IN LAND VALUES

DECLINE IN SUBURBAN PROPERTY. SOME PERTINENT COMMENTS. The triennial revaluation of the city of Wellington and its suburbs should have been made this year; but Mr Ames, tho City Valuer, informed a ‘- Times ” representative yesterday that the Government had decided not to revalue this year, but to take the valuations made in 1906 -as tho basis for rating until it is decided to make a fresh valuation. '■ It, was certainly intended that the valuation should bo made,” said •Mr Ames, ‘‘but it was subsequently decided to let tho present valuations stand for another year. All the City Valuer has had to do is add the improvements and subdivisions with duo regard to the changes of ownership, etc. —on to the values taken three years • ago, on account of there being certain rating on capital value.

ANNUAL VALUES'. There are certain city rates payable on annual values. These values are arrived at by adding tho unimproved Value and the value of improvements together, and 6 per cent, of that gives the annual value, upon winch the council fixes a tax. Now thatrthas been decided not to revalue Wellington, it may be that the council will reduco tie rates for annual value because improvements to the extent or perhaps £200,000 or £300,000 have been made during the past twelve months.” 01TY AND SUBURBS.

Asked how the values of properties in and around Wellington were- keepinig , ut> at "bli© present time, iMr Aine«> 1 had some i-nt-eresting remarks 1 to make. “I do not think you can buy land on ,Lambton ouay,” ho said, “for jmy--1 thing lees than the values made three years ago. In fact, there have hecn sales recently when land brought more than mv values. Of oourso, I »m op-akin of the business portion of the city when I talk of values keeping up. There has been a considerable drop in prices outside the city in the outlying suburbs. At Island Bay the drop is much more noticeable than elsewhere. Land in that suburb which could have been sold for £lO a, foot two or throe years ago can be obtained for £7 now, or even less. Hataitai has also gone back, but not to the same extent as Island Bay. Kelburne ‘hangs on all right, but- very few sales are taking placo -at present. In fact, no sales of any extent are taking place anywhere.

OUTRAGEOUS PRICES. The values of suburban properties commenced to drop- about twelve months ago. .1 really think the price of suburban property was far too high. City residential property is also too high. It is absurd that a person has to pay £2O or £25 a foot for a residential site. I think such prices are outrageous, and my opinion is that £8 ar £lO is quite enough per foot for vuch sites. Of course, the area for residential sites within the city is very limited, and that affects values, hut vhon prices such as I have quoted have to he paid for laud it makes people charge'a terribly high rent for houses, fake, for instance, a piece of land with a frontage of 40ft at £25 a foot. That means £IOOO to buy it. You put a house on it worth, say. £IOOO. You ■have then expended ‘ £2OOO, and as that means at'least 7} per-cent., £l5O a year rent would need to be charged, without taxes, insurance, upkeep, otc. Why, that is a ridiculous rent for anybody to pay. And if people pay such high prices for land they. certainly want to -get it back. OUT OF PROPORTION. In regard to the suburbs, the prices were altogether out of proportion. The land was just boomed. Speculators bought land, and puffed it up. There was plenty, of money about, and the land 'went up to a fictitious price. If you watch tire papers at all closely' you will see any number of properties being sold by the mortgagees. A year or two back such was a rare occurrence. I think it will be a very long time before tilings right themselves in tho suburbs. This is because there is such a largo quantity of property on the’ market. K-handallah, Crofton, Ilntt, and other places have all gone back. There is any amount of land there, but it is not selling at all freely and not celling at all- in some pieces.

BUSINESS SITES SECURE. Business sites anywhere within a radius of half a mile of tho General Post Office are safe and sound in regard to .values, and according to tho prices being asked and received it is quite clear the properties are not overvalued. In the residential portion of the city the values have perhaps gone back slightly, but I think they will right themselves. It is quite evident, however. ®that there are more empty bouses than there were some twelve months or so ago, and this may have the effect of bringing rents down- to some extent. Twelve months ago you could not get a house for love or money. It is only the outlying suburban properties that are really unsound in my opinion. I think lots cf people endeavoured to purchase beyond their means, the result being that properties ate coming back on the mortgagees, who are soiling every day.