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Archive for October 6th, 2012

“Early indications suggest the 80:20 Deferred Payment Initiative has been well received, with 16 units sold and reservations placed on another 16 of the 115 houses in the pilot phase. The value of these transactions generated in the two weeks since launch is €8.4 million” NAMA statement issued by Gordon MRM on 23rd May, 2012

It was 8th May 2012 when NAMA launched its long-awaited deferred mortgage initiative whereby NAMA will refund you up to 20% of the purchase price if the value of your purchase declines in the next five years. The scheme was announced almost a year exactly, previously and there were murmurs that NAMA was not handling the introduction of the scheme very competently. When the scheme was announced, so also were the details of the first 115 homes to which the new financing product would apply. A fortnight after the scheme was launched, NAMA issued a gushing press release in which it claimed it had sold 16 units and had taken deposits on an additional 16 – so 32 sales in the bag with a value of €8.4m in a fortnight. Great success – bualadh bos!

But fast forward four months and last weekend, the Property Price Register (PPR) was launched, and it would seem that to the 21st September 2012, just 13 sales worth just over €2m* have been registered in schemes in which NAMA had 115 units available. It should be said that errors have been identified in the PPR but on the face of it, NAMA wasn’t being straight with us when it issued its press release in May, and if there were 16-32 units in the bag in May, you would expect even more in September…

NAMA was asked for a comment on the apparent discrepancy, but has not responded at time of writing.

*4 units were offered in Carrickmines Manor and it seems there have been 11 sales to 21st September 2012 with an average sale price of about €150,000. As only 4 units were offered with the deferred mortgage product, four units at €150,000 are assumed to have taken place.

UPDATE: 7th October 2012. Although no explanation for the discrepancy is forthcoming this Sunday morning, a NAMA spokesperson says there is no question of overstatement of the position at any time

UPDATE: 28th November 2012. Almost incredibly, NAMA is claiming that it has to date sold 81 homes for an overall total of €15m (average €185,185). It is unclear if this is from just the 115 homes originally offered on the pilot scheme or if it includes the 180 additional homes offered in October 2012. This information was provided in a parliamentary question asked by Fine Gael’s Eoghan Murphy.

Deputy Eoghan Murphy asked the Minister for Finance the number of people that have taken up National Assets Management Agency’s 80:20 deferred payment initiative scheme.

Minister for Finance, Michael Noonan: NAMA advises that to date the sale of 81 houses with a combined value of over €15 million have been sold under the 80:20 Deferred Payment Initiative, which was launched on a pilot basis on 8th May in respect to 115 houses and extended on 15th October to an additional 180 houses.

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Chart of the Week

The Central Bank of Irelandpublished a report on residential property crashes during the week in which the Bank concluded that based on the experience of crashes in Sweden, Norway, Finland and Japan in the 1980s/90s and 2000s, that Ireland’s houses won’t be back at 2007 levels until between 2018-2029. Now the Nordic countries and Japan are interesting of course, but it is a wonder that no-one wants to research a closer-to-home example, both geographically and in time. Northern Ireland has seen its residential property decline by 53% from peak to the end of June 2012, and it seems prices there are at best shaky still. And within the UK, its decline from peak is also an outlier.

 

 

Transparency Event of the Week

On Sunday last at 1pm, the Property Price Register went live and the shock on here was that the website didn’t fall over with the volume of traffic! At last we finally have actual residential property prices in Ireland, it’s been a long time coming and just look, after five days, PropertyPriceRegister.ie is the 570th most viewed website in Ireland.

Look at the Business Post’s by comparison.

This time next week, it should be in the Top 100 and by the end of the month the Top 20. Speaking of Top 20, the top 20 highest prices paid for residential property since 2010 seemed to contain a clanger or two!

Lack of Transparency Event of the Week

 

This was the week – of all weeks – that Minister for Education and Skills Ruairi Quinn refused to provide the sums paid by his Department at his behest in 2011 to private land owners for land to build schools. How many millionaires did Minister Quinn create last year? We don’t know but the previous year, two were created by his predecessor, Mary Coughlan. We are still waiting to see what the payments were in the Health Service Executive (HSE) to private land owners, and hopefully Sinn Fein who is submitting these questions has asked the Minister for Transport, Tourism and Sport for his Department’s list which is likely to be the most lengthy (and expensive)

 

Quote of the Week

“He also shared with me his view on recent events and I am satisfied that there is another context to the story that he has not been able to publicly articulate, given the media atmosphere at this time. This context needs to be discussed with the party’s members and he is considering how to do that at some point in the future.” Labour party chairman, Deputy Colm Keaveney in a letter on 3rd October 2012 to Labour party members to reassure them amid ongoing tribulations. Deputy Keaveney intrigued us all with the mysterious reference to “another context to the story” which An Tanaiste suggested was the need for government stability, though why Eamon Gilmore had been unable to previously “publicly articulate” this is perhaps just as mysterious. Elsewhere in the letter, Deputy Keaveney writes “There must be a degree of confidentiality concerning internal correspondence like this. Without it we will not be able to have full and frank discussions on party policy or on other issues” – it took less than 48 hours for the letter to become available online…

“I do not know if the Minister is a fan of the late actor Humphrey Bogart but when it comes to the selection of primary health care centres in Balbriggan, Rick’s joint in Casablanca definitely comes to my mind. Of all the streets, of all the areas in all of Balbriggan, the primary care centre would land in the lap of a Fine Gael businessman, a contributor to Fine Gael and a supporter of the Minister. Not only that but according to the Irish Independent, ACC Bank and Treasury Holdings have judgments on two tranches of that site. Therefore, a lease with the Health Service Executive would increase the value of this site enormously, thus alleviating the financial difficulties of the Fine Gael supporter in question. The gentleman who was given the lease is also a contributor to Fine Gael.” Deputy Joe Higgins in the Dail on 3rd October 2012 in a debate with Minister for Health James Reilly

“It is a scandal” Deputy Mattie McGrath in the Dail on 2nd October 2012 referring to the lack of credit available to small and medium businesses, and presumably the delay by Minister for Jobs Innovation and Enterprise in launching the €150m partial loan guarantee scheme, announced in December 2011, enacted into law in July 2012, but we are still awaiting the first loan to be granted.

“Irish taxpayers are now paying the bankers’ bills to stop a domino effect that could have dragged the whole European banking system down. Therefore, solidarity with Ireland is to give something back. You took the burden on your shoulders to avoid the crash of the systems of other countries, including my country. Therefore, I find the 27% German participation in the package for Ireland is to give solidarity back to the country that showed solidarity with us.” Martin Schulz, President of the European Parliament and German politician in an address to the Dail on 4th October 2012. It is unclear how his sentiments have gone down, back home in Germany. Can’t see Germans gifting Ireland 27% of anything meaningful, but the debt negotiations continue…

Word of the Week

“Complicated”

“It’s a very, very complicated system” Fine Gael TD Brian Walsh on the Vincent Bornw Show on 4th October 2012 from 8min30here, describing the criteria for selecting sites for the development of primary care centres. It’s great to see this word being used in a context other than the renegotiation of the terms of the infernal Anglo promissory notes where cynics claimed that the word was being used to deflect attention from the fact that there was no progress being made. The same cynics are probably now suggesting it is being used here for the same purpose, to deflect attention.

“Substantive”

Labour party chairman Colm Keaveney had a “substantive” meeting with party leader Eamon Gilmore on 2nd October to discuss a number of pressing issues including the fall-out from the Roisin Shortall resignation. The letter from Deputy Keaveney to the party faithful, which revealed his meeting with An Tanaiste, came into the public domain yesterday. Deputy Keaveney also says there will be “substantive” discussions on Budget 2013 at a specially-convened meeting in November. “Substantive” seems to mean in the context of Irish public life, that something is being taken seriously, no, we really mean it this time.

Magazine Cover of the Week

Well done to An Taoiseach Enda Kenny for getting on the cover of Time magazine, generating a positive impression of the Celtic Fight Back. Inside, there’s little that is new but he generally hits the right notes, particularly for an international audience. Let’s hope his exposure leads to the success echoing that of Sean Lemass’s cover in the 1960s, in terms of investment and raising the profile of the country.

Not everyone gets on the cover of Time magazine, but for those wannabes whose abilities are insufficient to garner such an honour, they can always mock up their own Time cover, as our current Minister for Justice, Equality and Defence did with this leaflet from 2009

Goalhanging Politician of the Week

Former senator, Dan Boyle presently director of the Green Party. Back in 2010 when Michael Finneran was the housing minister in the Fianna Fail/Green coalition government, this blog tracked Minister Finneran’s progress with introducing a property price register, or House Price Database as it was then being termed. And practically every fortnight, a Labour or Fine Gael deputy would submit a parliamentary question asking about progress only to be fobbed off with talk of working groups – which incidentally didn’t have terms of reference, resources or deadlines – or the Data Protection Act. Now Minister Finneran was from Fianna Fail but in the coalition, there was no evidence of delays being challenged by the Green minority. And of course, 2010 came and went without any new register, and it took Minister Shatter over 18 months to get it implemented as the responsible minister. And of course prior to 2010, there was all sorts of support from all parties for a register, but somehow when they got into government, it was kicked into the long grass. Thank you again, IMF!

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