The Irish housing market is set to "correct upwards fairly quickly", according to one of the country's biggest still-standing developers, Michael O'Flynn.
The Cork builder said, however, finance streams from sources other than Ireland's banks would be required to fund new development.
"The market is going to correct and correct upwards fairly quickly," O'Flynn said. "The recent trends are there, the market is increasing as we speak, probably further than the stats show."
The Cork developer has a 35-year track record at home and abroad and successfully restructured his €1.5bn debt with Nama, where he went in as a top 10 borrower. His Britain and German developments rake in healthy rental income.
With the freeze on bank capital, money from giant international funds like Lone Star and Apollo is going to be a major part of the story that finances this recovery, he predicts.
"You have to ask the question, can we afford not to engage and put out the red carpet for these institutional investors? There isn't really an alternative."
He warns of growing scarcity of stock in areas of key Irish housing demand.
"The price rises we're seeing now were inevitable. The stock that is there is running out and what's really concerning is we're not actually building – there are no housing proposals of any scale in the pipeline. That can only mean one thing: in areas where people want to live there will be undersupply, in the main cities and hub towns.
"A lot of houses were built in places where there won't be demand for decades to come, but there has to be distinction between that and the need for stock where people want to live and work."
The biggest issue blocking a recovery and meeting the 20,000 unit annual housing demand predicted by economists is finance.
"The banks have been psychologically damaged by the property industry," says O'Flynn. "The pillar banks are looking at property but I think will only be involved in a very minor way for quite a while.
"Historically, there was very little institutional money in property and very few property vehicles; it was an unsophisticated model heavily relying on the bank funding. The REITs are to be welcomed, but they're not going to fund development."
Something else needs to fill the vacuum, he believes.
O'Flynn sees a likely finance model as more collaboration between international money and local talent, as has recently happened with Los Angeles-based investor Oaktree and Christopher Bennett's local Bennett Group on development in Dublin's docklands area, with Nama also involved.
"A lot of international capital is looking at Ireland and is or will team up with companies that have the skill set for them to work with," he said, and he is actively exploring this route.
"I have met lots of international capital providers and there has been a lot of interest in working with us, partly because we have lots of overseas interests that have been useful reputationally for getting them to look at Ireland."
He demurs on revealing who he is dealing with, but a source with knowledge of the process said that his company had talked with Blackstone, Starwood, Apollo, Cerberus and Lone Star.
Developers like O'Flynn want to get out from under Nama and get on with their lives.
It has been reported that a portfolio of his loans will come to market soon. He must surely hope it will attract the international investor interest that other recent Nama auctions have.