Nama sets €320k price tag for 20,000 homes in Dublin Docklands
Nama's chief executive has said that virtually all of the 20,000 homes it plans to build, located mainly in Dublin, will go on sale for less than €320,000 each.
Speaking at the announcement of Nama's investment programme, where up to €5.6bn in total funding will be dedicated to the construction of 20,000 residential units, Nama's Brendan McDonagh said €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 starter 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 once its €320,000, [for] the first-time buyer, that's the limit of their capacity under the [Central Bank] prudential rules."
Speaking 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 that will be more than that, but it will be very few."
A majority (78pc) of the homes to be constructed under the plan will be in the capital, with a further 15pc in neighbouring counties (Kildare, Wicklow and Meath), while the remaining 7pc will be outside the greater Dublin area. Nama expects to have 2,300 units completed by the end of the year.
Speaking at the announcement yesterday, Finance Minister Michael Noonan said: "The [Central Bank] macro-prudential rules were 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 approval 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.
Central Bank economist Gabriel Fagan strongly defended the lending rules, speaking at a property conference. He said the early evidence suggested the measures were cooling the property market.
But the Association of Expert Mortgage Advisers 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.
Nama also announced a major docklands office development that will include 3.8m square feet of commercial space and 2,000 apartments. It will require total funding of €1.9bn.
This project has already been started, with preparations made for the demolition of structures at Boland's Mills on Dublin's Pearse Street. In all, €170m of funding has been put in place for this project, which will include apartments, offices and a shop complex for Boland's Quay.
These developments are expected to generate up to 30,000 jobs when construction is at its peak. Nama said the programmes were likely to increase its profit.
"You could speculate it [Nama's surplus] could be over €2bn, we're not going to be any more precise," said Nama chairman Frank Daly.