LAND VALUES.

Taranaki Herald, Volume LXVIII, Issue 16769, 19 June 1920, Page 6

LAND VALUES.

A BANKER’S VIEWS.. Mr. Harold Beauchamp, chairman of the Bank of New Zealand, expressed himself thus at the annual meeting ot the bank on the subject of land values. The buying and selling of land—especially farm land—has proceeded at a rapid rate, and prices of such land,' whioJi were thought a year ago to have reached very higu figures, have mounted higher and higher. It is no doubt a matter of common knowledge that many of. these transactions are carried tnrough on a very small cash payment, nearly the whole of the purchase money being represented by a' mortgage, of, a series of mortgages, of which the last vendor holds the latest. une facility with which men possessing little capital have thus been enabled to purchase areas of land much beyond their ability to improve, and work, has been a potent factor in putting up the price of land against the buyer who really Juts adequate means to carry out his undertakings. Now, making _ the fullest allowance for the productivity of the soil and our wonderful climate, I am stiif' of opinion that sooner dr later this country will suffer severely through the absurdly high rates at whioh>t,o satisfy the earth hunger that is existing, country lands have been changing hands within recent times. It may be argu-ed—-in fact, is argued by some people—that buyers are justified in giving such prices when they take into account the returns they have received from thesoil during the past five years, a.v£ I admit that in some cases the results have seemed to warrant , tne prices paid. But, with the existing prospect' of dearer money and the certainty o? a decline in the purchasing power of the countries that have been devastated by the war, it is neither wise nor prudent to base land values upon the assumption that the late boom prices for our produce are going to continue indefinitely. Many cases have come under our notice where the prices recently paid has been double, and in some instances treble, that at which the property had changed hands in 1914. Prices for dairying land have run up to £l5O per acre, and wo have heard reports that even £2OO per acre and more has been paid in some cases. When the greater part of such purchase-money remains on mortgage, imagine what would be the position of the mortgagor, thus heavily encumbered, in the event of a fall in the price of dairy produce of. say, 25 per cent. It may be that a mortgage does not occasion the farmer the same concern as it does a business man, for I Enow of; some farms on which no fewer than five mortgages were current at the same time. Needless to say, that class of security does not commend itself to us. Indeed, with tho object of checking speculation, this and other banks in New Zealand are refusing advances to customers to enable them to buy land at these inflated prices unless applicants, by including other property in the security, can make the cover unquestionably ample. It is significant that many shrewd and well-to-do people are to-day taking the utmost advantage of the present land boom to subdivide and realise upon their holding#.