Despite the fact that the Property Price Register seems to show muted results for the NAMA deferred mortgage product launched on 8th May, 2012, NAMA insists that the pilot scheme has been a success, and the Agency has today announced it is extending the scheme to an additional 180 homes in 12 counties – remember the pilot scheme announced in May 2012 only applied to 115 properties in three counties.
The NAMA scheme which NAMA calls a “deferred payment initiative” involves buyers getting a normal mortgage from one of NAMA’s designated banks – AIB/EBS, Bank of Ireland and PTSB. After five years, the value of the property will be assessed and NAMA will knock any decline in value, up to 20%, off the original purchase price. The scheme was designed to give reassurance to buyers that if prices continued to fall, then NAMA would bear the risk up to 20% over five years.
NAMA has said that it eventually hopes to extend the scheme to a total of 750 homes. The extension of the scheme announced today applies to the following properties:
![Phase II[1]_Page_1](https://namawinelake.files.wordpress.com/2012/10/phase-ii1_page_1.jpg?w=500)
NAMA Wine Lake 
If you saw these in an exam question for a finance course you wouldn’t be surprised.
But the core question isn’t really one of value is it. It’s one of risk. In that why on earth would you carry the risk for NAMA even at the 20% off the price today. When the price will be 20% less in 5 years time. Why not buy in 5 years time and allow NAMA carry the risk while you gain from whatever compounding you get on the deposit cash.
Dublin properties are still way over-priced, With a little effort, you could find the equivalent or better in any one of several major thriving world class cities for less. And get a job too.(thriving being a relative term)
It’s interesting to note the Clonlara Co Clare house going for €150,000. They lie in the village, ~100m from a shop, pub, primary school, GAA club (on the make) and your choice of either Roman Catholic or Church of Ireland church.
Then again, the last sale according to the property price register had them going for €115,000 in June of last year.
Since I find myself humming and haawing over these house, I’m guessing they have probably reached their bottom. However, I don’t expect them to rise much farther for a very long time.
Why, why oh why would someone pay 180k for a 4 bed detached in Athy when there is a 4 bed semi, in a mature estate on sale for 89,500? How can NAMA justify these prices? Utter nonsense.
Prices in Naul dropped a day or two after the houses were added to the scheme the last time. I’d expect similar drops this time too.
@patlyndo,NAMA does not actually own any of the houses nor does it set the asking prices.But its does have a tremendous advantage over the ‘owner’ of the other house,in being able to escrow/set aside 20% of the proceeds.
There was talk that some insurance company,was planning on offering a similar scheme for non NAMA,entities or individuals.
But you are more likely to catch another glimpse of Kate Middletwon’s t**’s,or read an article in the Indo by Sam Smyth,than ever come across that product deployed in the marketplace,NAMA enjoys an unfair competitive advantage over non NAMA owners.
http://www.nama.ie/news/nama-extends-8020-deferred-payment-initiative-to-an-additional-180-houses-in-12-counties/
@John, it does not own the properties, it does however, “control” the loans for these properties and as a tax funded entity, it is using taxpayers money to “insure” against price falls, even though, a quick flick through similiar properties in the relevant areas show a huge discrepancy in prices.
It certainly does set it’s asking prices, it’s objective is to get as much as they can for the taxpayer, from the taxpayer. It is using it’s power to finance and control property at unrealistic asking prices. It is not selling homes, but mortgages to protect against falls that have already happened. It is against so many laws of competition and much more than I would know. Yet it is a private entity?????
@patlyndo there are many questions around this scheme.
Why ‘these’ ones over others,do the developers agree to promote world peace..never speak disparagingly about NAMA,or agree to be photographed in a speedo poolside in Portugal,promoting the life of “reilly’ under NAMA ?
What is the selection process based on,if Brendan or Frank like your ‘look’ or what.
O’Reilly is up to his absolute neck, drowning in debt yet qualifies-why ?
“He is Nama’s largest client with debts of close to €3bn but the Irish Mail on Sunday can reveal that developer Joe O’Reilly still retains a lifestyle of extraordinary opulence at his luxury Dublin home.”
http://www.dailymail.co.uk/news/article-2063815/3bn-debtor-living-life-OReilly-Developer-sprawling-Dublin-mansion.html
Is the developers original loan reduced by the actual PP or only 80% of that,as 20% is held back?
By the way,it does not provide mortgages,B of I,AIB and TSB are but not NAMA.
Speaking of Joe O’Reilly and NAMA-link to ‘that’ documentary last night.
Iniúchadh Oidhreacht na Cásca
http://www.tg4.ie/en/tg4-player/tg4-player.html