LAND VALUES.

Manawatu Herald, Volume XLII, Issue 2141, 19 June 1920, Page 2

LAND VALUES.

MR. HAROLD BEAUCHAMP. Chairman of Directors of the Bank of N.Z., speaking at the annual meeting, held in A\ elliugton on ihursdiiy, in referring to the above subject, said; “In several of my past addresses I have referred to the high prices paid in this Dominion for country lands, and pointed out the danger of basing land values upon current prices ruling for produce. Similar warnings have been uttered by others occupying responsible positions,' but so far they have gone unheeded. The buying and selling of land —especially farm land —has proceeded at a rapid rate, and prices of such land, Avhieh were thought a year ago to have reached very high figures have mounted higher and higher. - It is no doubt a matter of common knowledge that many of these transactions are carried through on u very stliall cash payment, nearly the whole of the purchase money* being represented by a mortgage, or a series of mortgages, of which the last Vendor holds the latest. The facility with which men possessing little capital have thus been enabled to purchase areas of land much hey’ond their ability to improve and work, has been a potent factor in putting up the price of land against the buyer who really lias adequate means to carry out his undertakings. Now, making the fullest allowance for the productivity of the soil and our wonderful climate, I am still of opinion that sooner or later this country will suffer severely through the absurdly

high rales at which, to satisfy the earth hunger that-is existing, country lands have been changing hands within recent times. It may be argued—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 the soil during the past five years, and I admit that in some cases- the results have seemed to warrant the prices- paid. But, with the existing prospect of dearer money and the certainty of a decline in the purchasing power of the countries that-have been devastated by the war, it is neither wise nor prudent to base laud 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. price 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 we have heard reports that even £2OO per acre and more has been paid in some eases. Vfhere the greater part of such purchasemoney remains on mortgage, imagine what would he the position of the mortgagor, thus heavily encumbered, in the event of a fall in (he price of dairy produce of, say, 25 per cent. It may he that a mortgage does not occasion a'farmer the same concern as it does a business man, for I know of some farms on which no fewer than live mortgages were current at the same time. ‘ Needless to say, that class of security docs not commend itself to us. Indeed, with the 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 arc to-day taking the utmost advantage of the present land boom to sub-divide and realise upon their holdings,”