Delays to NAMA paying out for the first toxic loans – still time to act.

The Sunday Business Post reports that NAMA is likely to miss its first scheduled payment for toxic loans (February 12th, 2010) as a result in delays in getting EU approval, the EU dealing with a FG complaint and delays within NAMA itself in setting up a special purpose vehicle as an instrument in its operations.

Whilst the EU ponders state-aid rules and the FG complaint, there is still time to write to your TD and demand transparency in how NAMA pays for toxic loans and to ensure sufficient safeguards are built into the valuation process to deal with little surprises like the

1. 300,000 vacant homes

2. population growth (or reduction)

3 the Supreme Court’s recent ruling that companies in examinership can repudiate leases

4. the ending of upward only rent reviews

5. abolition of property tax incentives

6. the continuation in the Irish downturn for the next year and rising unemployment

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Housing and Irish Population

There is now a new entry showing the 2010 in greater detail and using the latest statistics from the CSO – in summary it shows the estimates below to be very prudent.

So what do we know?

There are 1.985m homes in the country

302,625 are vacant homes and a further 49,000 are holiday homes.

10,000 homes are scheduled to be built in 2010

The average occupied home size is 2.8 people.

The population of Ireland in April 2009 was 4,459,300.

The birth rate in Ireland is 15 per 1000 (one of the highest in the developed world)

The death rate in Ireland is 7.5 per 1000 (one of the lowest in the developed world)

Emigration and Immigration statistics are published by the CSO on an annual basis. The last published statistics cover the year ended April 2009. The last 20 years statistics are

				Net Inflow/
		Emigrants	Immigrants	(Outflow)
Both sexes	1990	n/a	n/a
	1991	n/a	n/a
	1992	33.4	40.7	7.3
	1993	35.1	34.7	-0.4
	1994	34.8	30.1	-4.7
	1995	33.1	31.2	-1.9
	1996	31.2	39.2	8
	1997	25.3	44.5	19.2
	1998	28.6	46	17.4
	1999	31.5	48.9	17.4
	2000	26.6	52.6	26
	2001	26.2	59	32.8
	2002	25.6	66.9	41.3
	2003	29.3	60	30.7
	2004	26.5	58.5	32
	2005	29.4	84.6	55.2
	2006	36	107.8	71.8
	2007	42.2	109.5	67.3
	2008	45.3	83.8	38.5
	2009	65.1	57.3	-7.8
		605.2	1055.3	450.1
Data for 2007 to 2009 is preliminary

The Live Register (which includes part-time workers and workers on benefits and others not available for work) stands at 423,595 in December 2009. The seasonally adjusted unemployment rate stands at 12.5% which equates to about 275,000 people. (both sources the CSO). The latest Central Bank of Ireland Report estimates unemployment will rise to 13.5% by the second half of this year. The same report forecasts that there will be a contraction of 2% in the Irish economy in 2010.

What does all of this mean for our population and our requirements for housing? Take a look!

What it means is that the 300,00o vacant stock of properties could last us nearly 100 years, 10 times the stated life-span of NAMA. In fact if emigration spirals which is a distinct possibility it could take longer to clear the overhang.

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Puerto Banus, a fine place to toast the birth of NAMA.

As NAMA over the next couple of weeks is likely to pay out the first tranche of cash from the nation’s pockets, it is worth remembering the alleged reaction of developers when they heard the NAMA scheme outlined last September.

This was the Independent’s reporting of the news.

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Is the Public beginning to cop on?

This is a link to a letter in today’s Irish Independent which outlines one buyer’s experience with bargaining for properties on so-called ghost estates. The  letter concludes with the comment “maybe they prefer to let properties lie empty in the hope that both NAMA and the unfortunate public will dish out big money for unsold houses and apartments.”Post Tags

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NAMA – Ireland’s answer to the Common Agricultural Policy

Wine lakes, butter mountains and 300,000 vacant homes

With NAMA presently reviewing the first loans with an intention to part with €17bn of public money in the next month, it is still not too late to demand transparency and a review of the project.

Remember Mr Lenihan’s assertion in September 2009 that we had reached the bottom of the market? As far as residential housing is concerned the ESRI/Permanent TSB has revealed an overall fall in prices of 8.5% in the last four months of 2009 with the rate of fall accelerating. A survey of property pundits in the Irish Times at the start of January predicted a median fall of 9% in residential prices in 2010. And that was before the revelation that there are 300,000 vacant houses in the State, significantly more than previously factored into government economic forecasts. And with the revelation of 300,000 vacant homes came the assertion that sellers were hoarding homes waiting for prices to rise.

Apart from the property bombshells, we are confronted with population shocks. Even with our present high birthrate of 15 in 1000 and our present low death rate of 7.5 in 1000 , we are again faced with spiralling emigration and limited immigration. 2009 was the first year since 1995 that migration turned negative. After 14 years of net inflows of almost 0.5m people, we are now facing a period of net outflows as people try to escape a state with a Live Register over 400,000 which at the same time deters any inward economic migration. There is a very real prospect of negative population growth in the next few years.

And in the middle of all this, we have NAMA which is at risk of becoming Ireland’s very own answer to the Common Agricultural Policy by setting minimum prices and “fixing” the market. Unlike agriculture, property is not a vital industry to the State. If these homes were to be sold off at rock-bottom prices at €10-30,000 a piece, I think the private sector would find uses for them perhaps in ways which might stimulate the economy (tourism for example) or reduce public expenditure (low social housing costs for example). NAMA has no business protecting an overhang in property which may last a hundred years, not 10 . Of course NAMA will deal with far more than residential property which is familiar to us all, but structural changes with commercial property and taxation are also afoot. We need transparency with NAMA and a review of what is being paid from the pockets of our people. That should happen now.

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