Property Values

Progress, Volume XI, Issue 5, 1 January 1916, Page 520

Property Values

THE EFFECT OF THE WAR A certain amount of liveliness has been evident lately in the New Zealand property market, and agents are beginning to be better satisfied with business than during the first year of the war. The Government is not pushing its land for settlement purchases under present conditions, but no doubt this branch will have to go ahead rapidly when returned soldiers increase in number and ask to be settled on the land, in accordance with the promise of Parliament.

Though nearer the centre of stress and trouble, English property agents take a cheerful view. The recent presidential address of Mr. J. George Head, President of the Auctioneers' and Estate Agents' Institute of the United Kingdom dealt entirely with war values of rent-property. After analysing influences affecting the matter, Mr. Head summarised the conclusions arrived at as follows:—That, owing to the upheaval of our lives in all these respects (economical, domestic, and financial) the property market is depressed, and prices have fallen to such an extent that the question is no longer "What will the property fetch?" but "Can we find a buyer?"

That the revival will come not immediately with the arrival of peace and the improvement in trade, but after an interval, when profits have eased the money market, reduced the demand for capital, and having been saved, are ripe for investment. That values, although much above the prices now obtainable, will be lower at the conclusion of the war than they were before, owing to the demand for capital in other spheres, the abundance and cheapness of gilt-edged securities, and the high rate of interest caused by these conditions. That present values should be calculated not at panic prices, but with relation to the lowered figures likely to prevail during the transition period, by deducting therefrom a sum sufficient to allow for accumulation of interest during the duration of the war. and a further sum for contingencies. That this transition period of depression may be expected to last some years, according to the analogy presented by previous wars. That during the period of transition (given a rest from new disturbing influences) prices will gradually rise, and that alter it has passed they will regain and probably surpass their previous altitude. The situation (the speaker thought) is one which calls for grave attention and some anxiety, but not for despondency, and certainly not for panic. We are passing through a serious crisis; but storms have been weathered before by the ship of our island State, and favouring winds will again fill the sails and waft it to a prosperous haven.