House prices in capital 'stable', insists NAMA
Finance Minister Michael Noonan and the head of the National Asset Management Agency (NAMA) joined forces yesterday to tell house buyers that property prices in Dublin are "stabilising".
The claims come a day after the Central Statistics Office (CSO) released figures showing property prices dropped by 0.8pc in the capital and 1pc in the rest of the country in June.
And the Central Bank yesterday warned that banks here are making it more difficult for people to get a mortgage by making greater demands on borrowers.
But NAMA chief Brendan McDonagh questioned the CSO figures, pointing out that the data does not take account of houses sold to cash buyers which -- according to housing experts -- account for up to a third of property transactions.
"We see evidence that the Dublin market is stabilising," said Mr McDonagh.
Outside the capital the small number of sales makes it impossible to properly assess the market, he said.
NAMA controls around 14,000 houses and apartments in Ireland.
Mr McDonagh added that accurate data on house prices remains elusive and will remain so until a planned property register, due in the autumn, is up and running.
He was speaking in Dublin where NAMA announced its first-ever profit. The agency made a profit of €247m in 2011, but had to write off over five times that amount, €1.3bn, from the value of its assets due to falling property prices.
At the same event, Mr Noonan agreed that the Dublin market is "stabilising".
However, he said he expects prices to continue to fluctuate as more buyers enter the market.
The Central Bank yesterday expressed fresh concerns that banks are making it even harder to get a mortgage by making greater demands on borrowers.
Larger deposits, greater scrutiny of consumers' bank records and lending smaller amounts are among the ways banks make it harder for new buyers to get a mortgage, a eurozone lending survey found.
The Professional Insurance Brokers Association (PIBA) called on the Central Bank and the Government to force banks to loosen lending conditions.
Rachel Doyle, of PIBA, said there were signs of stronger demand for mortgages but banks were "dysfunctional".
"If these banks are allowed to restrict lending in this extraordinary and unjustified fashion it will impact on the recovery of the economy. This downward spiral has to be addressed," she added.
NAMA makes €247m profit, but writes off €1.3bn: see business