It was no less a figure than Michael Noonan who once said disdainfully of the National Asset Management Agency that it was “very hard to unscramble an egg”.
That was in 2011, when the incoming Minister for Finance was asked if the “bad bank” should be scrapped.
He’d hardly scrap it now either, but for wholly different reasons.
With “housing” the buzzword in Government as Fine Gael and Labour seek to regain political momentum, Nama is now set to intensify its involvement in the residential property market. This is in addition to a step-up in its commercial activities in the north docks area of Dublin.
Key element
In their Statement of Government Priorities for 2014-2016 last Friday, Taoiseach Enda Kenny and Tánaiste Joan Burton made it clear that they see Nama as a key element of the effort to improve the availability and affordability of housing and boost the office market: "Nama will be tasked with ensuring the timely and coherent delivery of a successful Strategic Development Zone to maximise the delivery of residential housing units, as well as to deliver commercial space in Dublin's central business district."
We can expect to hear more today when Noonan and Nama chairman Frank Daly present the outcome of a formal review of the agency carried out in line with the legislation setting it up.
Here is the basic thinking: as Nama has control over large tracts of development land in west and south Dublin, the plan now is to exercise its influence to expedite the use of such property to tackle the supply shortage behind sale-price and rental inflation.
This can be done through the provision of more development financing to viable developers from Nama’s reserves, which now stand at some €2 billion.
An alternative is to directly acquire assets underpinning Nama loans to borrowers who are in default. Nama would be legally obliged to pay market rates to acquire outright the property, as distinct from the loan. But such an approach, or even the threat of such an approach, could bring forward the development of unused property.
As for the docks, Daly is on record as saying the return of cranes to the skyline can be expected shortly. This follows planning approval for the Dublin Docklands Strategic Development Zone.
No one wants a return to runaway property markets. At issue now is whether the agency can do more to bring about a return to normality in the market. The Government believes it can.
