LOSS ON STATE HOUSES

Te Awamutu Courier, Volume 77, Issue 6978, 15 October 1948, Page 5

LOSS ON STATE HOUSES

£116,000 LAST YEAR HIGHER BUILDING COSTS A working loss of £116,224 on State houses was shown in 1947-48 compared with a loss of £58,833 in 194647, according to the annual report of the State Advances Corporation. The report says that the increased rate of loss is directly related to the steady increase in building costs over recent years, which has resulted in higher charges a unit for interest, depreciation, insurance, and maintenance, and that the quantum of loss will tend to increase as more houses are built at present prices. The rent's receivable last year amounted to £1,662,003, compared with £1,479,662 in 1946-47- Included in the charges against this reevnue are depreciation at the rate sufficient to write off the construction cost in 60 years, insurance provision at the average rate chargeable on these types of dwellings by insurance companies, interest and the capital cost, maintenance at 11% bn the cost of improvements, and losses and vacant tenancies at 5% of the gross rental. The following statistical information is given: Number of housing units let up to March 31st, 1948, 25,226; book value as at March, 31st, 1948, £37,229,125; total amount of rent receivable from March 31st, 1937 to March 31st, 1948, £9,403,349; amount of rent in arrears at March 31st, 1948, £6145; total amount of rent written off from 1937 to 1948, £4745. The report said that viewed in relation to the capital investment and rent receivable losses of rent and arrears were gratifyingly low.