NAMA in plan to kickstart property market
Published 28/07/2011 | 05:00
Also for the first time it will today put up all the properties it has seized and repossessed since it began on its website.
It is likely more than 1,000 properties will be displayed. They are under the control of receivers appointed by NAMA.
"The slowness in property is certainly not helping us,'' Mr Daly said.
He said NAMA needed a rise of 10pc in property prices or it was unlikely to be profitable in the long run.
To counter this, the scheme will work along the following lines on an apartment worth €200,000:
•The bank will loan €140,000, NAMA will contribute €40,000 and the buyer will put down a deposit of €20,000.
•If the property rises in value in five years' time, repayments on the combined bank/NAMA €180,000 loan will continue as normal.
•But if the property falls in value, following an independent valuation, NAMA will not seek repayment for up to €40,000. This will lower the repayments and crucially cushion the buyer from any negative equity built up over the five years.
"The reality is that in the long run a restored property market, a modestly restored market, benefits everyone," Mr Daly said.
"I know some people will be concerned that if somebody has a house for sale, they will be saying, my property is never going to shift now that Nama is assisting the shifting of these other properties, I can understand that, but what do we do? All sit back and do nothing?"
The NAMA chairman also revealed the agency was considering using its land assets for forestry or windfarms, with the remainder returning to agricultural use. He said the agency was keen to avoid "dumping'' a lot of spare land on small, localised markets.
Mr Daly also confirmed that Ireland's developers were going to be pursued for the full value of the debts they had personally guaranteed. This is likely to mean many of them losing all their personal assets and potentially their share of the family home.
But he insisted this pursuit would only take place if there was money and assets available from a developer.
"To be realistic, there will come a point where the effort will not be worth it. There is an outlay to this, there are legal fees, the energy, the effort, you have to make a reasonable assessment of what is there, what is left in the pot," Mr Daly added.
Meanwhile, the Irish Independent has also learned that owners of mansions will pay about €600 a year when the new property tax comes into effect.
The €100 household service charge, which will run for the next two years, will be the minimum faced by households when the property tax comes in.
The average three-bedroom, semi-detached home will cost between €200 and €250 in property tax, under provisional plans being drawn up by the Government.
The property tax is expected to range from €100 to €600, a government source said.
The value of the property and the income of the household will be the factors dictating how much has to be paid.
Frank Daly interview -- BUSINESS week