‘Not High Enough’

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Nama CEO Brendan McDonagh

Dublin house prices are still not high enough to attract new builders, [Nama CEO Brendan McDonagh] said, even though July figures from the Central Statistics Office showed a 23pc rise in prices across the county.

“People talk about why isn’t there houses being built in Dublin… The reality is, the reason they are not being built is because there really isn’t enough profit for the private investor to invest his capital into it. If prices drop, he mightn’t get his money back. So I think prices will continue to correct.

The chief executive of the bad debt agency added that price rises have meant some properties earmarked for social housing have instead been sold.

Nama made 5,500 units under its control available to the Department of the Environment and Housing Agency, so that they could be used for social housing purposes, in an attempt to address the massive shortage of available properties for people on the housing register.

But just 2,000 of these were accepted, in part because price rises have taken many apartments out of negative equity, allowing debtors to sell them.

House price rises needed to ease homes shortage: Nama chief (Sarah McCabe, Sunday Independent)

Meanwhile, also in the Sunday Independent…

Screen Shot 2014-09-22 at 09.20.24Screen Shot 2014-09-22 at 09.20.42

 

Well healed, eh?

 

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22 thoughts on “‘Not High Enough’

  1. fits

    And hovering up the property. Desperate typos, they’d want to sharpen up in D’Olier St! (or wherever they are these days)

  2. Rep

    So basically, what NAMA wants is another price bubble. Super stuff. What genius decides that what the country needs to get itself out of a mess created by a collapsed housing bubble is to create another housing bubble?

    1. Cean

      NAMA and the Government all want prices rising. .

      “So I think prices will continue to correct.”

      And correct in Ireland means rise.

      1. Medium Sized C

        NAMA bought loans when prices were way down.
        They have no interest and were never tasked with making prices sustainable.
        A correction for them IS a return to boom prices.
        Which would allow them to recover the money spent on the houses/loans.

        Its way easier for the Government to encourage rising prices than it is to attempt to fix our messed up property dependant economy. Plus there is an election on the horizon. So anything they can claim is good will be sold as good.

        Get ready for high house prices being sold as FG/Lab finest hour.
        The really stupid stuff is yet to come.

  3. blueswannabe

    http://www.businessinsider.com/global-property-guide-growing-markets-2014-9#3-ireland-10

    Meanwhile, no 3 in the World!

    Bubble bubble, toil and trouble,
    Buy, turn, leave sites as rubble,
    Selling houses, buyers fake,
    Rise the prices, betray their faith,
    Make them borrow so you can flog,
    A 2 bed house in a fog,
    Of fear an pressure and here’s the thing,
    Make the fools feel like Kings,
    For a charm of NAMA trouble,
    Don’t dare speak out against the bubble.

  4. Buzz

    I don’t know a single person whose apartment has been taken out of negative equity. What is McDonagh talking about? A two-bed in Sandyford bought in 2004 for €310K, which wasn’t even the height of the madness, is now selling for about €250K. Where are these mythical apartments sprung from negative equity?

    Enda and his cronies are pursing the same confidence trick that Bertie and the FF boys pulled off and they expect us to fall for it again and re-elect them. I don’t think so.

  5. Nikkeboentje

    The guy is simply stating a fact. People questioned why new homes where not being constructed and he gave an honest answer.
    Don’t blame NAMA or the government for rising house prices, it is simple supply and demand. At present, the banks cannot be blamed either as it is difficult to secure a mortgage.

    1. Cean

      Huh, you can’t blame NAMA?

      “Nama made 5,500 units under its control available to the Department of the Environment and Housing Agency,”

      “But just 2,000 of these were accepted, in part because price rises have taken many apartments out of negative equity, allowing debtors to sell them.”

      So where NAMA just sitting on these properties until the prices went up? Surely that’s influencing the market in a big way instead of allowing a correction?

      1. Buzz

        Exactly. And the banks – who can afford to sit tight because they were bailed out by us – sitting on repossessed properties and refusing to sell until they get €X amount “We’re waiting for the market to catch up”. Most people can’t afford to sit on assets until they get the price they deem acceptable. Bailing them out has allowed them to manipulate the market.

        Sell by all means but it would be crazy to buy in this artifically inflated market.

        1. Nikkeboentje

          But as long as people continue to buy, the prices will continue to increase. So you should be blaming the people buying the houses, they are the one forcing the prices up.

          1. Buzz

            People need places to live, much like they need food to eat. This doesn’t mean prices should be punitive so that Enda’s cronies can line their pockets at the expense of the rest. Having a roof over one’s head is an essential, not a luxury. When government policy penalises us for acquiring essentials, you have to wonder who they are serving.

  6. Clampers Outside!

    I’d like to know what is this expectant profit from housing development of those he says won’t build.

    What was their profit margin before 2008, before 2004, and before 2000… and earlier…. I’m betting they are waiting for the highest of past records to be met before getting in. Without any clarification it should be safe to assume this, IMO, and going by developer greed in the past.

    1. Cean

      But sure you have Michael Noonan pointing out that house prices are good value now compared to the boom. It seems boom pricing is what everyone is aiming for and anything else isn’t worth it.

    2. Nikkeboentje

      I think the issue at the moment is the lack of financing available to developers which means that they have to put a lot more equity into a development at present. Therefore to get the same percentage Return On Equity, the actual amount of profit needs to be much higher than in the past.

  7. Lilly

    If Nama is saying property prices are not high enough, you can bet they’re too high and set to drop like a stone any time now. Thanks Nama.

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