You want to Buy a Home!

Cue (NZERS), Issue 37, 15 December 1945, Page 8

You want to Buy a Home!

AS everyone knows, New Zealand is desperately short of houses. And the return of servicemen from overseas does nothing to alleviate the position. Under conditions of uncontrolled supply and demand prices would long ago have soared far above their present level. That level is quite high enough, but the Land Sales Court and its committees have done a sterling job in imposing a ceiling on prices.

With some hard searching and hard bargaining, and a great deal of patience, it should be possible formost servicemen to acquire some sort of dwelling in the course of time. To make the process as quick and as cheap, and the result as satisfactory as is possible under prevailing conditions a few suggestions are submitted here for the assistance of intending house builders and house buyers.

The first suggestion is, as in all other forms of rehabilitation, to go first to your rehabilitation officer, in your home town. Tell him what you want in the way of a house, and make sure that you are eligible for a housing loan, if you intend to apply for one. The rehabilitation officer will give each eligible serviceman a certificate vouching for the fact, and this will show agents and sellers that you can find the money for the house you are contemplating. Furthermore, the Department keeps property registers, and you may find there the very property you are looking for.

If you are going to build you must buy a section. There are many pitfalls in this apparently simple process. You

have spotted an excellent section. Good. But consider. Is it near a shopping centre, to save your wife’s legs? Is it near a school, to save your children’s? And is it near tram or bus, to save your own? Visualise your dream-house. Can it be built on the section so that the rooms get the sun, and at the right times? Note the prevailing wind. Is there shelter from it? What is the soil like, and is there any likelihood of the section flooding? Lastly, is any reinforcing needed before the ground can be built on, or is the ground filled—in? In either case be very careful. Building to ward off subsidence on steep sections can be very expensive, and badly filled sections sometimes result in the house later sagging, with regrettable effects on the structure.

When you have decided that the section has all the virtues, or at least as many as you can expect at the price, and your wife has vetted the view and approved of the neighbourhood, your next step is to see . that all the technicalities are in order. For instance, the boundary pegs should be inspected to make sure that the section you buy is really the section you were shown. Fences are sometimes feet away from the true boundary. Ascertain whether there are any building restrictions and check the availability of gas, water and telephone. Lastly, if you hope to connect up a town drainage system, find out where the sewer runs. It may not run down the street in front of the section, as its situation depends on the fall of the ground, so that you might find yourself involved in obtaining

drainage right through someone else’s property. This list sounds formidable, but your solicitor will attend to much of it, and none of it should be neglected if you want to “live happily the rest of your life.”

When you have your section you will then need to consider in detail the plan of the house that is to go on it. An article on house-planning appeared in Cue 33. Sufficient here to say that unless you have money of your own to supplement it, the rehabilitation loan of LISOO will suffice only for a small compact house of about 1000 square feet. The utmost economy in planning is consequently called for, if you are to make the most of the space. • Most builders can help, for they usually have many good plans of small houses, and one of these, with minor modifications, is almost sure to fill the bill.

A more difficult problem than the planning is to get the actual material to build the home. As a returned serviceman you get practically equal priority with state housing contractors for materials, but that doesn’t mean that you won’t have to wait. You will. And fittings, such as hinges, locks and electrical fittings, are even harder to get than bricks and timber. So be prepared for

some delay, and, if you want speed, don’t specify fancy fittings that are not available locally.

The home-builder’s problem has, then, three aspects, namely where to build, who to employ to do the building, and how to finance it. The first point has been dealt with. The second can be settled by first selecting two or three builders with a reputation for honest craftsmanship, and asking for a competitive price. And when you’ve

picked your builder, trust him and don’t worry him by changing your mind once a week on points of design and planning.

The third aspect, finance, is one that merits a little space. As a serviceman in the market for a modest house you can nowhere get money cheaper, or on better terms than from the State Advances Corporation. The interest rate of 3%is below the market rate, and if the price of the house does not exceed LISOO the Rehabilitation Department gives you a supplementary loan interest free, for the difference between the lending value as fixed by the State Advances Department and the actual present, day cost as determined by the Land Sales Court. Nor is this loan repayable unless you sell the property. Now, leaving the supplementary loan out of the question at the moment, suppose that you have bought a section out of your savings and gratuity and have borrowed LI4OO to build the house on it, on a thirty-year term, under the rehabilitation scheme. On this sum payments of principal and interest will total L7l-1- a year. Rates and insurance will average about LI4, and Ll 5 should be put aside for future painting and repairs. This makes the annual outgoings about LIOO, which is 38/6 a week. Some of this is money saved, as your interest in the property grows each year, since the loan is being steadily repaid, but meanwhile the 38/6 comes relentlessly off the weekly paycheque. So before you build consider this point. If you . can’t afford the repayments you may prefer to apply for a state rental house and wait for prices to come down. That is a fair gamble as long as you realise that they may quite conceivably go up. That is

a decision which every man must make for himself.

Not every man will want to build. Some will buy. For them there are further points to watch. All the remarks already made about situation and legal technicalities apply, but there is the added complication of the building. There is only one safe course before buying. Get a really competent valuer, such as the banks and trustee firms employ, to inspect the house and give you his valuation and report. He may notice, where you wouldn’t, that there is borer infection, or signs of damp infiltration, or dry-rot in the floor joists, or signs of subsidence in the foundations. Even if you still decide to buy, such points will give you levers for bargaining which may save you many times the valuation fee, and the valuation will tell you whether the

price is reasonable. A good valuer will save his clients from buying houses which would be bad bargains at any price, and from paying too much for others.

So whether you build, or whether you buy, go warily. Don’t be rushed into buying by the old tale that several others are after the property, and don’t hesitate to go to your rehabilitation officer for advice and help. He knows the reputation of most of the dealers, agents and builders, and can guide you to the good ones, of whom there are plenty. He can also ensure that you benefit from the many concessions, such as reduced legal fees, available for the ex-serviceman. But however much help you get, remember also that rehabilitation is your business, and the more intelligence and energy you put into it the better .you will fare.