FICTITIOUS LAND VALUES

Otago Witness, Issue 3595, 6 February 1923, Page 28

FICTITIOUS LAND VALUES

SOME INTERESTING COMPARISONS. (From Our Own Correspondent.) WELLINGTON, January 30. Though there may be a good deal that is inaccurate regarding the views on New Zealand expressed by the British Empire Exhi bition Mission, there are those within the dominion who consider that there was warrant for the criticism that a fictitious value has been set upon land in New Zealand. A London financier who recently travelled through New Zealand, and made exhaustive inquiries regarding our financial position, was very decided on this point, and expressed privately the opinion that New Zealand lands were greatly over-mortgaged. Land values in New Zealand, he said, would have to be written down very considerably. Sir Harold Beauchamp, who, from his business and financial experience in New Zealand, may be regarded as entitled to express an opinion, agrees in the main with the criticism. " I have always contended,” he says, “ that in respect of dairying lands capable of carrying, say, one cow to two acres, the value should not exceed, say, £4O per acre. True, some farmers claim that they can run as much as one cow per acre all the year round, but that, I fancy, represents only a very small proportion of the land that is used for dairy purposes in this country. However, to put the matter to the real test. During the height of the boom a well-known property in the Manawatu v?as sold for £llO per acre, the buyer paying the usual small deposit, and giving a mortgage to ihe vendor for the balance of the purchase money. That property to-day has been returned to the vendor, who i 3 now willing to sell at £45 per acre. This, it will be seen, represents a drop of £65 per acre during, say, two years.” There is no blinking the fact that a'great many over-mortgaged properties are in the market for sale in New Zealand to-day, and Sir Harold Beauchamp says: “It seems to me that the soonpr the people of the country realise that we were not warranted in giving these extremely high prices for land the better it will be for all concerned. It is a matter of very grave concern in the working of dairy farms. The owners have really not taken into account the value of their own time, and the value of the time of then- children who may have been helping them in carrying on their farm operations. If these people had been depending entirely on hired labour, 1 am quite satisfied they would not have been able to make both

ends meet. It must be remembered that in. rspeet of most of the primary products we are getting higher prices than those ruling in pre-war days, and had not farmers paid such absurdly high prices for land they would have been in a most comfortable position, despite tho higher rate of taxation, which it has been necessary to pay to meet the cost of the war.” In this connection Sir Harold has something to say that may be worth taking to heart in regard to the agitation that has been going on in regard to rural banks. This, he says, is largely due to the inability of a number of farmers to obtain accommodation from existing banks to enable them to purchase land at these inflated values. In the ordinary case there is no difficulty whatever for a farmer who is in a position to offer adequate security to get any legitimate accommodation from the banks now trading in this country upon favourable terms and conditions. Sir Harold is able to prove by comparison with England that New Zealand values are fictitious. For instance, a Hampshire farm of SO acres, including 40 acres of pasture, with farm house, registered cows, and pedigree pigs, was for sale at £33 per acre. A similar farm in the Manawatu was advertised at £SB per acre. Similarly there was a grass farm of 167 acres in Kent, with stoutly constructed farm residence, contain? ing two reception rooms, five bedrooms, and domestic offices, and an extensive range of farm buildings, at £24 per acre. The same sized property at Marton, all ploughable, with 20 acres of manuka, was priced at £3O. The third comparison was between similar farms in Hertfordshire and Whakatane. One was offered at £35, and the other at £65 per acre. Allowing to New Zealand all the advantages that might, reasonably be claimed for_ it, _ there could he no justification for maintaining- that improved farm lands in ine dominion were worth double the price of similar land in rural England. Therefore the price of land in New Zealand must be brought down to a more reasonable level before production could be rnado to pay.