Economist Alan Ahearne has said that the National Asset Management Agency will not hoard properties it seizes through foreclosures on developers but will sell some early on to generate cashflow for the agency.
Speaking at the annual conference of the Irish Auctioneers and Valuers Institute (IAVI) in Dublin today, Dr Ahearne, an adviser to Minister for Finance Brian Lenihan, said that there was no incentive by not selling assets for 10 years and waiting for property markets to recover.
"Asset management companies need cash coming in - they need cashflow. The bonds issued by Nama to purchase the loans - the interest payments on these need to be paid," he said. "Nama will release properties. It won't do it all in one go - it will do it gradually over time."
Dr Ahearne said that in the United States the Resolution Trust Company, which was similar to Nama, hoarded properties initially. "Eventually it learned a lesson that that wasn't good for the market and wasn't good for the institution itself. It did release the properties and got the transactions," he said.
He said that the Irish banks would end up well capitalised "very shortly" once Nama determines the capital requirements over the coming months. "We will fairly soon have a banking system that is fit for purpose," he said.
UCD economist Colm McCarthy questioned whether there should be high stamp duty rates when there needs to be more transactions in the property market. "There is no point in a failure by sellers who hold defaulting mortgages hanging on for prices that are just not going to return," he said.
Mr McCarthy said that perhaps there needed to be a further review of property taxes in order to generate activity in the market. "It would be wonderful if some bottom fishers from overseas would come in and take a lot of these dud properties off the Irish State and the Irish banking system," he said.
The president of the IAVI, Aine Meyler, a valuer based in Dublin, repeated the organisation's call for a National Property Price Register showing accurate, "real-time" property prices.
