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Bargain time as thousands of houses to be sold

BARGAIN hunters will be tempted by thousands of cut-price houses and apartments over the coming months as NAMA offloads a huge stockpile of assets.

Finance Minister Michael Noonan yesterday ordered the agency to start selling both commercial and residential property -- worth up to €2.7bn -- as soon as possible.

NAMA will sit down with Ireland's leading banks within the coming fortnight to organise finance for purchasers.

The aim is to kick-start the beleaguered property market and provide a "floor" for prices.

However it is a calculated risk, because NAMA could flood the market with cheap properties to the detriment of other sellers.

The agency has direct or indirect control over more than 10,000 apartments and an unknown amount of houses.

"The properties will be sold at prices people are prepared to pay, not what sellers think they are worth," a NAMA source said.

The source added that "major bargains" would be offered but they would be careful to drip- feed the supply of property, particularly in smaller rural towns.

The development came on the same day as a major auction of distressed property in Dublin raked in €14.5m -- with most of the lots selling for more than their reserve.

All but two of the 82 properties sold, and raked in more than €14.5m. for six receivers and their bank clients.

The sales exceeded expectations by about €4m.

Mr Noonan said yesterday he had met with the board of NAMA and had told him of the need to start shifting property.

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"An organisation like NAMA has to start putting properties on the market at a low level so that a floor is established," he said. "Once a floor is established, the international experience is that in a short period of time, the floor lifts to about 20pc above the bottom and it stays there," he said.

He was speaking at Government buildings to announce that Ireland had met its targets for the first quarter of the €85bn IMF-EU bailout deal.

The IMF, ECB and EU separately said Ireland was making good progress on overcoming its economic crisis.

NAMA's original purpose was to hoard properties, but increasingly the IMF has put pressure on to start selling to convince markets that NAMA is able to claw back money.

NAMA is spending a total of €37bn on buying up assets. It bought them at a discount of 58pc.

The sale of properties comes from two sources. First, developers will be ordered to sell assets to reduce their debts. Secondly, NAMA itself will sell properties, starting with commercial real estate in the first six months, and apartments and houses in the second six .

The Department of Finance could not say the value of property sales Mr Noonan wanted NAMA to sell.

Local auctioneers will be used to offload properties on a commission.

But property specialists warned there is still no functioning banking system to lend for property. Society of Chartered Surveyors Ireland joint president Kirsten Mehl warned the only market for the assets would be from foreign buyers.

However, NAMA is formulating a new scheme where it will combine with the banks to offer loans to buyers. The majority of a loan will come from either AIB or Bank of Ireland, but crucially NAMA will provide the final 20 or 30pc of a loan.

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