The National Asset Management Agency will have to consider the long term interest of the tax payer in responding to a request from the Minister for Finance Michael Noonan to consider ways it could use land it controls to help reign in spiralling property prices.
The agency was getting good prices for assets currently and feels it would be prudent to take advantage of these if possible, according to Nama's chairman Frank Daly. However, he added there was a need to consider whether taxpayers would ultimately gain from a quick sale.
He was responding to comments made to the Oireachtas Finance Committee this week by Mr Noonan. He said he had asked the agency to carry out a review.
“I’ve asked them, for example, what would be the consequences of, at the end of 2015, taking the whole residual Nama book and doing what IBRC did to their residual book - selling it all off in a six-month period,” he said.
“I’ve asked them (Nama) if they have any suggestions on how we could work that, and would it be possible to use it as a brake on the market,” Mr Noonan said.
Mr Daly said: “The questions being posed by the minister are the ones we’d be asking ourselves.”
He added that Nama was already providing social housing, particularly in Dublin. He said the agency will have delivered over 1,000 houses under its social housing programme by the end of 2014.
Mr Daly added that a debate on whether Nama should keep going with the accelerated sales process in which it is currently engaged in or to bundle it up, as suggested by Mr Noonan, was something being discussed both internally and by the Government.
Speaking on the Today with Sean O’Rourke show, Mr Daly said there was a lot of interest in Nama-controlled properties in Ireland from investors.
He said the agency was aware of concerns that a move to offload more properties could destabilise the market further but he wasn’t sure if this would be the case. He added that a key question was whether off-loading property would give a good return to taxpayers.
“Right from the beginning of Nama we’ve had people knocking on our door offering us derisory prices for our assets. I think they are much more realistic now, partly because we convinced them that we didn’t have to sell in a hurry.”
His comments come after a report by estate agents DNG earlier this month revealed that property prices in Dublin are rising by as much as €5,000 a month.
DNG’s House Price Gauge suggested house prices in the capital have risen by 23 per cent in the last 12 months as demand continues to exceed supply.
Mr Noonan said he has asked Nama for advice on how the agency might intervene to help reduce rising prices, adding that previous mechanisms employed to take the heat out of the property market, such as Stamp Duty, have often failed.
Sinn Féin said the Minister for Finance could not decide Nama’s future and called for an independent analysis to be undertaken over the agency’s fate.
“Nama has six years left in which to responsibly dispose of its assets, ensuring the taxpayer receives the maximum return for them. I am concerned if it winds up too quickly Nama will not attain the maximum value for its loans. Firesales could also actually damage property prices conversely, by driving them down to equally unsustainable levels,” said the party’s finance spokesman Pearse Doherty.
* this story was amended on April 19th
