Sessional_Paper_1938 — Page 110

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In January, 1934, the flat was let to another tenant at $80 per month. This tenant left in October, 1934, and in November, 1934, the flat was let to the tenant con- cerning whom the letter above referred to was written at a rent of $70 per month. In July, 1935, this tenant asked for a reduction in rent which was refused. In December, 1935, he gave a month's notice to the landlords. In February, 1936, he was still in occupation and again gave notice. As from April, 1936, the landlords agreed to a rent of $60 per month, and although the terms of tenancy made the tenant liable for excess water charges, the landlords did not in fact claim such charges from him. In October, 1936, the tenant was three months in arrears with his reduced rent.

In December, 1936, he was again two months in arrears. In February of this year the landlords notified him that his rent would be increased to $100 per month, subject to a reduction if a lease for one year were signed.

14. A European limited company submitted to us a comparative statement compiled from the company's records, which we were invited to inspect, relating to three types of Chinese tenement property owned by the company. The period covered is 1934-1937. In every case, without taking into account losses sustained by excess consumption of water, vacancies and defaults in payment of rent, which are subjects. dealt with later in this Report, the statement shows throughout a decline in rent since the commencement of 1934, and in no single instance had the rent at the end of 1937 regained the level obtaining four years previously. We were assured that there was no immediate increase of rent under contemplation.

15. A Chinese limited company submitted to us figures in relation to property owned or managed by the company, which were vouched for by a leading European bank, as follows:-

(a) 328 flats, Chinese, without flush system in two streets in the Eastern dis- trict. Inclusive figures were given for the years 1929-1937. In the first street the gross annual rental fell from a maximum of $51,709.49 in 1930 to $18,633.60 in 1935, and in the second from a maximum of $51,601.90 in 1929 to $18,660.70 in 1936. In both streets average rentals of $40 per flat in 1929 had been reduced to an average of $24 by 1938, repre- senting a reduction of 40%. It is not intended to increase rents at present.

(b) 224 Chinese flats without flush system in the Eastern district. In 1930 the gross rental received amounted to $63,681.00. In 1934 it had dropped to $21,938.00. In 1937 it recovered to $38,981.50. The average reduc- tion in rent per flat was 45%. It is not intended to increase rents at present.

(c) 84 Chinese flats of concrete with flush system. In 1932, when the flats were not fully occupied, the gross rental received amounted to $31,730.25. In 1935 it had dropped to $19,214.00. In 1937 it recovered to $24,454.40. In 1930 the average rent per flat was $40. At present the average is $26-$30 per month. It is not intended to increase rents at present. (d) 32 European flats. In 1934, when the flats were not fully occupied, the gross rental received was $20,550.00, In 1936 it had dropped to $14,838.00. In 1937 it had recovered to $18,098.13. In 1934 the average rent per flat per month was $70. At present the average is $58 per month. It is not intended to increase rents at present.

16. A large European limited company sent us figures showing that the rents of the majority of their European flats and houses were to be increased as from 1st April, 1938, but the increase in net rental returns varying from 1.61% to 4.58%, will only in one instance exceed the net returns obtained in 1933, and that by a trivial amount. The figures for the company's Chinese flats show an increase in rentals as from the 1st May, 1938, varying from 10:59% to 15.54%, but the com- pany acquired the property as mortgagee and entered into possession during the depression. The pre-depression rentals are not available. The net return with the proposed increases will not cover the interest charges on the amounts advanced on mortgage.