Business Irish

Saturday 20 January 2018

Agency set to rent apartments but sell more desirable houses

property

Emmet Oliver

There is virtually no interest in buying apartments at present was the blunt assessment of the property market delivered by NAMA chief executive Brendan McDonagh yesterday.

The agency had done market research on what accommodation buyers were seeking and apartments were not in demand, said Mr McDonagh.

As a result, NAMA was concentrating on shifting "family type homes", he said.

Apartment blocks, meanwhile, will be rented out and once tenants are in, it might be possible to sell blocks in their entirety, in schemes like those often used in Europe, said Mr McDonagh.

He was speaking after a meeting of the Oireachtas Committee on Public Expenditure and Reform, where he told members NAMA had approved sales of €4.6bn since the agency was set up.

To help that process a new mortgage product -- which protects a buyer from some level of negative equity -- will be introduced in the next few weeks with AIB, Bank of Ireland and Irish Life & Permanent.

Mr McDonagh told the Irish Independent about 750 houses would be sold using the mortgage product, in north and south Dublin and also in Cork.

This is the latest attempt by NAMA to spark activity in the residential and commercial housing markets.

During the meeting, Mr McDonagh and NAMA chairman Frank Daly revealed that a number of initiatives were under way to do this and also to sell loan assets generally, including:

•Brokers will be allowed to sell loans on NAMA's behalf, for a 1pc commission.

•NAMA will loan money directly to commercial property buyers under certain conditions, a process known as staple finance.

•NAMA will attempt to fill apartment blocks with tenants and then sell them on to apartment specialists who manage whole apartment blocks in a European-style structure.

•NAMA is forcing developers to slash their prices to entice younger buyers.

One developer in north Co Dublin slashed prices and his entire stock was sold in one weekend, said Mr McDonagh.

NAMA is still worried that mooted changes to upward-only rent review contracts could hit the value of its assets by up to 20pc. Mr McDonagh said this was not his estimate, but that of property experts.

NAMA's decision to put a list of properties for sale on its website had sparked activity and interest, said Mr McDonagh.

"There has been much interest from the public (more than 100,000 downloads) and in particular from younger people who are keen to use the current correction in property prices to purchase their own homes."

Irish Independent

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