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.
NAMA Wine Lake 