RATES OF INTEREST

Poverty Bay Herald, Volume LIV, Issue 16807, 21 November 1928, Page 7

RATES OF INTEREST

NO GENERAL REDUCTIONMUCH IMPROVED TONE AMPLE MONEY AVAILABLE. (Special to the Herald.! CHRISTCHURCH, this day. • Itumors have been current that money would be available in Christchurch on first; mortgages at a rate of interest, of 6 per cent., instead of per cent,, as generally has been the case. Investigations to-day showed, however, that although plenty of money is now available it is not likely, at any rate for some time to come, that it will be any more cheaply obtainable than it has been in the past. Knowing of one instance in which a man jiad fixed up a loan of £llOO at 6 per cent., a Sun reporter visited leading legal firms and building societies seeking to discover whether money was loosening up and getting easier." The opinions he received were interesting, and showed some differences, though in the main lines they agreed. "We have been letting out at 6 per cent., on good rural security for a considerable time,” said the principal of one of the largest aud oldest-estab-lished legal firms in the city. “It has been 6 per cent, there for the most part, and 6| per cent, on suburban security. In the North Island interest rates have always been to 1 per cent, higher than ours here. We have let out for 6 per cent, on good suburban security, too. Building societies keep at 6j and 7 per cent, on the scale, but theirs are always reducing loans, payable by instalments. Undoubtedly there is money about now if the security is good. In the ease of stock and station agents, for example, there is any amount of money available on good security. In business reasonable security must be demanded. ROUND THE CORNER. - “Altogether the tone is, in my opinion, much more hopeful; people are retrenching, and wool and dairy produce are very much brighter. The local traders felt the pinch in spending, but it was not an unmixed evil, for in taking care with spending they have been consolidating their position. Of course, it has been hard on the retailers while it lasted. The fact that interest is falling is shown in the keen demand for first-class shares producing a high rate. Things are very much more solid than they have been, and I firmly. believe that we are round the corner, though, it is not time for lavish expenditure yet.” A member of (another big legal firm did not think that there was any indication that money generally was coming down to 6 per cent., though in. some eases it might be so. It depended on two things, first, the amount of loan required, and, secondly, the security offering. “At the present time there is a tendency to prefer city property to farm lands,” he continued. “This is quite contrary to the position a short time ago. when farm land security was preferred tp city security. In my opinion the rqte 'of 61 per cent, will be maintained for some little time.”

The secretary of an investment society agreed that there was no suggestion of an alteration in the interest rates. There was, however, quite a lot of money available. There was also an easier feeling prevalent, but he would not put too much reliance on that, for the wish might be, the father of the thought. In his own business the rate was 7 per cent., but buildifig society rates had always been reckoned as £ per cent, higher than ordinary rates. Gen- j eraljy speaking, (there was now no shortage of money, and a good demand' for it. “Whether, in future, the average normal rate will drop, as you suggest, from 61 per cent, to 6 per cent., . is more than I can tell you. It certainly has not done so yet,” he added.