David McWilliams – firmly against NAMA.

One of NAMA’s most trenchant critics today reminds us of the absolutely horrible state of the property market in the State and raises again concerns of overpaying for assets. David McWilliams again calls for a capitalist solution to the ills besetting our two main banks, Bank of Ireland and AIB, and suggests a sell-off rather than the State pouring more money into them. What bank would be interested in buying these two entities is not clear.

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A real-time Register of actual sale prices…

First called for in the Kenny Report in 1973, the latest call for a Register of prices comes today from an unlikely quarter (unlikely because one of the main benefits of a Register would be to obviate estate-agent puffery), Tom Parlon of the CIF who says “It has been obvious for some time that Ireland needs a register that captures, in real time, movements in house prices. Hitherto, we have been relying on lagging indicators that tells us what has happened as opposed to what is happening. Given the centrality of the housing market in any domestic economy, a guide to house prices movements as they happen, as is available in the Northern Ireland, UK and US economies, is an absolute requirement”. It is amusing to this author that such calls were not made during the boom when upward speculation was rife but now that we are in a crash (now at 50% off peak says Parlon) where downward speculation is rife, the call emerges!

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Are commercial prices being artificially propped up in advance of NAMA (revisited)

One of the first developers to be NAMAed, Joe O’Reilly, is the subject of an Indie report today which claims that Anglo are keeping his firm going. Now of course the bank may be doing this because the alternative, a liquidation, may see the sale of distressed assets onto a weak market which would only exacerbate the bank’s losses (and as we own Anglo and have put in €4bn from national debt, you could say “our” losses). However it is an inescapable economic fact that supply is being prevented from coming onto the market which would serve to depress the market further. I hope NAMA valuers are watching.

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Introducing the NAMA valuers…

Valuation is one of the functions that NAMA has outsourced and indeed valuation services cover a spread of assets from property to loans to derivatives. The property valuers were named last August 2009 and one of the valuers DTZ Sherry Fitzgerald comes in for some unflattering comment today in a shopping centre rent review where it characterised a rent increase of 426pc as a typographical error. Retail Excellence Ireland (a retailers trade association has said)

“Landlords who are being lined up for NAMA are seeking to boost their yields and thus boost the valuation of their properties At the same time that some landlords are quoting high headline rents they are also doing deals with some retailers which include rent free periods,” he added.

Of course NAMA has a board and an executive to hold valuers to account, but as Lois Lane asked Superman who was flying with her through the sky “You’re holding me up. What’s holding you up?”. I repeat a call for a cross party select committee to frequently and routinely quiz NAMA on its activities.

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Are there tentative signs of residential activity picking up?

Ireland’s number 2 property (by number of properties for sale) website myhome.ie has reported that the number of sale agreed properties has risen dramatically (2-3 times) in January and February 2010 compared with a year earlier. The website’s press release is now available. The website reports that sales agreed have been steadily rising since September 2009, a period in which ESRI/Permanent TSB report a 8.5% fall in prices from Sept-Dec 2009 with falls accelerating towards the end of the year – statistics for Jan and Feb 2010 will not be published as they have decided to make the index quarterly with the next release in April 2010. The website emphasises it does not know how many of the “sale agreed ” properties have proceeded to completion though it did make the anecdotal observation that estate agents were being more diligent in ensuring documentation was in place before changing the status of a listing to “sale agreed”.

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