Posted by: gaiusc | 5 August, 2009

NAMA: the conundrum

The country is haemorrhaging jobs because our cost base is too high and we’re not competitive.

However a significant component of our cost base is the price of land, accommodation and rents. NAMA intend to hold onto land and property assets in order to realise the “long-term economic value” of these assets, i.e. market manipulation. Yesterday, Tom Parlon was kind enough to admit that the real value of these properties is about half of their present value.

NAMA will be under pressure to recover as much of the loan value as possible in order to reduce the pain for the taxpayer but is having a dominant player in the property market having a vested interest in higher property prices really a good thing for the country as a whole?

NAMA may well be able to maintain the illusion that Ireland has the most valuable real estate in the western world but it will be at the cost of the state’s financial health and most importantly, jobs.



  1. Heh! This is the sort of probing question that a lot of powers-that-be would prefer you not to ask!

    I think that a lot of this property will be bulldozed in the end. However, this might only mean a 0-15% loan recovery (assuming that some of the land can then be rezoned and sold for agricultural use, for example – optimistic, I know).

    Clearly, though, the government cannot just go and buy assets at, say, 60% of original value and then convert them into rubble! Hence, whatever happens, NAMA will sit on these units for years and anyone who bought property as a long-term investment is royally buggered.

    As for development land recovering its value… Only if global warming causes a mass migration away from the equatorial regions of the world!

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