Not sure if this has been posted, so anyway…
I wonder where he is getting this from?
I remember a poster from Japan a number of years ago recounting how he had made a decision to buy there after prices has stabilised for (IIRC) 6 months or so only for the bottom to fall out again immediately after he purchased. He recounted how there followed numerous false bottoms. Unfortunately I can’t find the original post now.
Even if there is considerable pent up demand from those who have been putting off a first purchase for years now, with the amount of property to be sold and net emigration (probably with a high concentration in the FTB age group) I can’t see how and artificially imposed bottom is going to hold in the longer term.
Isn’t what “people are prepared to pay” determined by their lender?
Which, according to the article above will be supplied by the banks supplemented by a 20-30% load from NAMA…
Surely there isn’t enough money around to keep that price supplementation going for long, is there?
Fair points. So, Nama will give people 20-30% more than their banks would give them so they can afford to buy for a higher price? Oh sweet mother of Jebus. It will then stop doing this once its property portfolio has been poured into the market.
Will Nama be able to lend only to people willing to buy from Nama or does it intend to spray money around to whoever wants it?
And if you take out a 25 year mortgage, part of which is with Nama, how does Nama wind itself down in 10 years? By selling its loan book back to a bank that didn’t want to lend the money in the first place? Might it have to sell at a discount?
Me no likey.
NAMA needs to collapse or be destroyed.
I’m assuming that NAMA has to guarantee the 20% or 30% above fair value when they sell the loan. It’s late here so I can’t fathom how this will be affected once the loan is paid down substantially in 10 years time.
It used to be, you know back in the days of some pretence of a semblance of capitalism, that there were damn good reasons why the Goverment or it’s agencies didn’t run banks.
Thing is some of the Bank ran the Government and look what has changed. Nothing.
Hasn’t the HCL fiasco shown that the government and NAMA are not permitted to set up a price support scheme aimed at a particular group of properties? This NAMA lending plan sounds the exact same to me: quasi-governmental aid to buyers to purchase a specific group of properties. Unless the lending scheme is applicable to every property for sale I think the plan is still born.
Notwithstanding that, I think it would be churlish in the extreme after years of giving out about this stuff not to take Mr. Noonan on his (considerably misguided, but apparently sincere) word and applaud the fact he seems to get the idea that finding a floor is advantageous to everyone.
The market floor following a crash isn’t the lowest point prices reach. Falls tend to “over correct” somewhat on the downside due to market momentum an lack of information, then correct back again upwards, slightly, to the floor level where they remain for some time, but I’ve never seen anyone attempt to quantify by how much the “over correction” would be.
To date, I have seen no data that suggest residential property in Ireland does not, as a general rule, have a floor of roughly 70% below the market peaks. IMHO, the downward momentum cause by emigration, lack of funding, oversupply and good old fashioned fear will ensure that prices drop below that level before “recovering” to hold around that mark for quite some time into the future.
Hmmmm, this sounds a bit like Home Choice Loan Rises Again:
State aid propety loan … CHECK
Specific property type … CHECK
Detrimental to other sellers … CHECK
Loans will add to the National Debt … CHECK
Distortion of competition … CHECK
Is it time for a re-run of this successful initiative?
I’m not sure the HomeChoiceLoan ever fell down. Their website is still up homechoiceloan.ie
get in now while it is stil up and running and/or property prices start rising!
Nama doesn’t own “assets” its owns loans against which assets and personal guarantees are secured.
If it wants to make its balance sheet smaller then it will have to instruct (or allow) distressed/non interest paying borrowers to sell the assets.
A key point is when the borrower will say ‘OK I will sell if you insist. But I presume the shortfall is going to disappear?’
What happens then eh? Perhaps Frank Daly will enlighten us at his next speaking engagement?
Sales above par debt are easy. Sales below par are murky.
The point is that it gives publicly-owned property an advantage over privately-owned property by supporting the former with public money. We managed to get the playing field levelled for new developments versus 2nd hand. Could we not urge the EU to demand the withdrawal of the loan offer by NAMA using the same argument?
Spoke to the Liquidator this morning he says yep we will see sales by June/July
Very interesting develOpment if this goes through…
Hopefully they saw sense from yesterday’s auction…
If the prices are low enough then we may just get some serious demand…
Let’s hope its not all smokes and mirrors…
How will theydo it… Will they follow the allsop method…
Ebay would probably do some free listings for them, any chance PayPal would organise mortgages?
Lol brendan…Knowing us Irish it will be the fxxx up of fxxx ups …
I’d lays abet it won’t be a patch on the allsop…
There was only 1 thing that was missing for me yesterday at allsop and that was the free finger food… I thInk I’ll send then a email about it… Do they not know us irish like our finger food…