Agency targets €320,000 price tag for new Dublin homes
Nama's chief executive has said that virtually all of the 20,000 homes to be constructed through its newly announced funding programme will cost less than €320,000.
Speaking at the announcement of Nama's investment programme yesterday, which will see it dedicate up to €5.6bn in total funding to the construction of 20,000 homes, Brendan McDonagh said that €320,000 is the limit of affordability for first-time buyers.
"In Dublin house prices are typically in the €300 to €330 per square foot price bracket," he said. "We can see from some of the schemes that have been launched that people in the started home bracket can get up to about €320,000. Anything that is between €320,000 and €400,000, the market is much more muted... but certainly once its €320,000, [for] the first-time buyer, that's the limit of their capacity under the [Central Bank] prudential rules."
Later, he said: "I would say that 95pc-97pc of them [the new housing units] will be in that starter home price bracket. There will be some ones that will be more than that, but it will be very few."
Over three-quarters (78pc) of the 20,000 houses will be in Dublin, with a further 15pc in neighbouring counties (Kildare, Wicklow and Meath). The remaining 7pc will be outside the greater Dublin area. Nama expects to have 2,300 housing units completed by the end of the year.
Speaking at the announcement yesterday, Finance Minister Michael Noonan said: "The [Central Bank] macro-prudential rules are not in place 12 months yet, there is no fair assessment of what effect they are having on the market but I would be confident that the Central Bank will keep these matters under review."
Earlier this week mortgage experts claimed the lending rules were leading to a situation where only the sons and daughters of rich parents were now able to afford a deposit to get approved for a mortgage.
New figures from the banks show the number of people approved for a mortgage was down 10pc in October compared with the same month last year.
Speaking at a property conference, Central Bank economist Gabriel Fagan strongly defended the lending rules.
He said the early evidence suggested the measures were cooling the property market.
But the Association of Expert Mortgage Advisers (AEMA) said young couples with families were unable to meet Central Bank rules on the size of deposits needed to qualify for a mortgage, particularly those in Dublin, and called for a review of the rules.