LAND VALUES.

Taranaki Daily News, 31 December 1921, Page 12

LAND VALUES.

“MUST BE REDUCED TO SAFE LEVEL.” \ Interesting references concerning land values were made by Mr. Harold Beauchamp, chairman of directors of the Bank of New Zealand., at the annual meeting of shareholders on Friday. “The very' high prices obtained for our primary products during the war years led to a quite unjustifiable increase in land values,” said Mr. Beauchamp. p Land was valued and trafficked in as if these abnormal prices had become stabilised. Little or no thought was given to the inevitable fall, and, unfortunately, instead of liabilities being reduced financial ' responsibilities were often largely increased. It is really a case of ‘history repeating itself,’ and disillusionment follows as a matter of course. It is quite clear that many farmers will not be able to carry on under present conditions, unable as they find themselves to pay interest on their mortgages, or even land tax on their land. Adjustments will have to take place; many properties will fall back into the hands of vendors, and in time conditions will once more revert to what

'is known as “normal.” Meantime it would be more than unwise to ignore the fact that a very difficult period lies i ahead, and that the co-operation of the i whole community is required to help j things along. i “In the light of experience, what are I the values of sheep lands and dairy j lands to-day? Are they worth 50 per ' cent, of the values placed upon them during the land boom ? It seems to me impossible to value lands at present on any reliable basis. Land is worth not only what it wiU produce to-day. but what it may reasonably be expected to produce in normal times. To base values entirely upon the income produced to-day would be as unreasonable as to base them on war-time returns. Normality must be looked for somewhere between the extremes, guided by prewar experience and the circumstances of the day. "It is essential, however, that land values be brought back to a safe level, having regard to the conditions which now prevail. To ascertain what the actual value Is, intending purchasers should go as carefully into the transaction as if they were purchasing a business. A vendor of a business produces his books shoeing his turnover and profits, etc., for of years. A farmer should also produce his books when disposing of his holding. The rough-and-ready method of land deals which has hitherto prevailed should become a thing of the past.

The values of lands in the Dominion must be brought down to a more reasonable level before production can be made to. pay. Labor costs and freights must also be reduced. Labor on farms is not as costly now as it was six or twelve months ago. There lias been an appreciable reduction in rates of freight by the regular oversea lines, and this will be of material assistance •to producers and others interested in the handling of our products. Railway freights, too, must come down, for they play a very important part in the cost of marketing tlie country's produce.”