Comments on: Do the NAMA figures add up? A broader and more realistic assessment of long-term economic value http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/ Irish Economy | World Economy | Property Market | Economic Analysis | Ronan Lyons Thu, 09 Feb 2012 11:57:49 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: 10% in 10 years revisited | Ronan Lyons http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-2147 10% in 10 years revisited | Ronan Lyons Tue, 21 Sep 2010 11:02:40 +0000 http://www.ronanlyons.com/?p=900#comment-2147 [...] this is not 20-20 hindsight, this is using the information available at the time. Many people, myself included and on more than one occasion, tried to make NAMA aware of this at the [...] [...] this is not 20-20 hindsight, this is using the information available at the time. Many people, myself included and on more than one occasion, tried to make NAMA aware of this at the [...]

]]> By: NAMA – a developer bailout – Smart Taxes Network http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1494 NAMA – a developer bailout – Smart Taxes Network Fri, 12 Mar 2010 13:12:29 +0000 http://www.ronanlyons.com/?p=900#comment-1494 [...] just reallocates the flooding problem. The approximately €8.4bn in Irish residential projectscovered by NAMA translates into about 34,000 residential units, taking €250,000 as an average [...] [...] just reallocates the flooding problem. The approximately €8.4bn in Irish residential projectscovered by NAMA translates into about 34,000 residential units, taking €250,000 as an average [...]

]]> By: NAMA number crunching – long term economic value – Smart Taxes Network http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1452 NAMA number crunching – long term economic value – Smart Taxes Network Fri, 19 Feb 2010 14:55:40 +0000 http://www.ronanlyons.com/?p=900#comment-1452 [...] Smart Taxes Network member and leading property economist Ronan Lyons has asked if the numbers add up and has done his own calculations in relation to “long term economic value”. A summary of his conclusion is below and his excellent post can be read in its entirety here. [...] [...] Smart Taxes Network member and leading property economist Ronan Lyons has asked if the numbers add up and has done his own calculations in relation to “long term economic value”. A summary of his conclusion is below and his excellent post can be read in its entirety here. [...]

]]> By: Another look at yields on Irish property, for the benefit of NAMA | Ronan Lyons http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1133 Another look at yields on Irish property, for the benefit of NAMA | Ronan Lyons Mon, 19 Oct 2009 08:23:53 +0000 http://www.ronanlyons.com/?p=900#comment-1133 [...] showing potential flaws with the long-term economic value (I have two modest examples here and here) was zero. The estimate of long-term economic value is explained just as before: It is estimated, [...] [...] showing potential flaws with the long-term economic value (I have two modest examples here and here) was zero. The estimate of long-term economic value is explained just as before: It is estimated, [...]

]]> By: Baz Grant http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1023 Baz Grant Thu, 24 Sep 2009 13:13:38 +0000 http://www.ronanlyons.com/?p=900#comment-1023 NAMA in a nutshell - a short film: http://www.youtube.com/watch?v=CE3yKoMOEQI NAMA in a nutshell – a short film:

http://www.youtube.com/watch?v=CE3yKoMOEQI

]]> By: adrem http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1020 adrem Mon, 21 Sep 2009 13:27:23 +0000 http://www.ronanlyons.com/?p=900#comment-1020 Ok ok - sheesh !! It wasn't by design - I just went to the top of the table and it starts with Dublin so I went with that - also the highest population density and property densisty so I reckoned it was a useful proxy - obviously not so much ! Ok ok – sheesh !!

It wasn’t by design – I just went to the top of the table and it starts with Dublin so I went with that – also the highest population density and property densisty so I reckoned it was a useful proxy – obviously not so much !

]]> By: Ronan Lyons http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1019 Ronan Lyons Mon, 21 Sep 2009 13:11:29 +0000 http://www.ronanlyons.com/?p=900#comment-1019 I'm sorry to be harsh on you, but one of the first things I said to you was to look at the details of the daft.ie rental yield and not just take the national average and find one example that seems to run counter to it. Look at the detail of the daft yield table, go back through past reports and see its evolution over time, look at how it differs across segments and you'll see what you've done is either by accident or design pick a combination of the type (1-beds have highest yields in the country) and location (Dublin city centre has the highest yields in the country) that best portrays yields in a positive light. Unfortunately, the vast vast majority of properties in Ireland are not 1-beds in Dublin city centre. I’m sorry to be harsh on you, but one of the first things I said to you was to look at the details of the daft.ie rental yield and not just take the national average and find one example that seems to run counter to it. Look at the detail of the daft yield table, go back through past reports and see its evolution over time, look at how it differs across segments and you’ll see what you’ve done is either by accident or design pick a combination of the type (1-beds have highest yields in the country) and location (Dublin city centre has the highest yields in the country) that best portrays yields in a positive light.

Unfortunately, the vast vast majority of properties in Ireland are not 1-beds in Dublin city centre.

]]> By: adrem http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1018 adrem Mon, 21 Sep 2009 13:07:13 +0000 http://www.ronanlyons.com/?p=900#comment-1018 OK. I wasn't trolling (and never have been) - you asked for comment and feedback and I gave it to you. I was using the same rent levels as you. At a 3% yield on 950 per month you get a purchase price of 380k. 4.7% is significantly higher than the 3%. Also I wasn't allowing for vacancies/maintenance in my numbers so I was applying the 3% yield to the full rental amount OK.

I wasn’t trolling (and never have been) – you asked for comment and feedback and I gave it to you.

I was using the same rent levels as you. At a 3% yield on 950 per month you get a purchase price of 380k.

4.7% is significantly higher than the 3%.

Also I wasn’t allowing for vacancies/maintenance in my numbers so I was applying the 3% yield to the full rental amount

]]> By: Ronan Lyons http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1017 Ronan Lyons Mon, 21 Sep 2009 12:05:22 +0000 http://www.ronanlyons.com/?p=900#comment-1017 One last time before I call troll: The last <a href="http://www.daft.ie/report/Daft-Rental-Report-Q2-2009.pdf" rel="nofollow">Daft rental report</a> says: - page 7: typical rent for a 1-bed in Dublin city centre is probably about €950 (€900 in Dublin 1, €1,000 in Dublin 2) - page 11: the yield for 1-bed in Dublin city centre is 4.7% - so 11 times the rent (allowing for the standard month's vacant/maintenance) = €10,450 What average price gives you a yield of 4.7% on €10,450 a year? €222,000, about half the price you're talking about. Now, do that for each region in the country and weight them by their populations and you get 3.3%. End of. One last time before I call troll:
The last Daft rental report says:
- page 7: typical rent for a 1-bed in Dublin city centre is probably about €950 (€900 in Dublin 1, €1,000 in Dublin 2)
- page 11: the yield for 1-bed in Dublin city centre is 4.7%
- so 11 times the rent (allowing for the standard month’s vacant/maintenance) = €10,450
What average price gives you a yield of 4.7% on €10,450 a year? €222,000, about half the price you’re talking about.

Now, do that for each region in the country and weight them by their populations and you get 3.3%.
End of.

]]> By: adrem http://www.ronanlyons.com/2009/09/17/do-the-nama-figures-add-up-a-broader-and-more-realistic-assessment-of-long-term-economic-value/comment-page-1/#comment-1016 adrem Mon, 21 Sep 2009 11:39:29 +0000 http://www.ronanlyons.com/?p=900#comment-1016 Ah come off it Ronan - it's nothing to do with prior beliefs - I've not made any wild assertions either, I've told you exactly what my calculation basis was - how much information do you want? The implied price (using your info and the DAFT rent) of a 1 bed in D1 is 356,800, in D2 it is 406,800 in D3 it is 340,000, in D4 it is 416,000 in D5 it is 326,800 in D6 it is 334,000 in D6W it is 328,000 in D7 it is 321,600 in D 8 it is 339,600 in D9 it is 325,200 in D10 it is 320,400 in D11 it is 331,600 in D12 it is 323,600 in D13 it is 343,600 in D14 it is 385,600 . . . . I'll stop now - point being if you look to purchase 1 bed apartments in any of the above locations there are units available significantly below those implied prices. As you seriously trying to asset that the above are average prices in those locations? Come off it. Maybe the Daft rental data is not accurate but (again) I am not making these numbers up they come from your employer and from you, don't attack the messenger. Ah come off it Ronan – it’s nothing to do with prior beliefs – I’ve not made any wild assertions either, I’ve told you exactly what my calculation basis was – how much information do you want? The implied price (using your info and the DAFT rent) of a 1 bed in D1 is 356,800, in D2 it is 406,800 in D3 it is 340,000, in D4 it is 416,000 in D5 it is 326,800 in D6 it is 334,000 in D6W it is 328,000 in D7 it is 321,600 in D 8 it is 339,600 in D9 it is 325,200 in D10 it is 320,400 in D11 it is 331,600 in D12 it is 323,600 in D13 it is 343,600 in D14 it is 385,600 . . . . I’ll stop now – point being if you look to purchase 1 bed apartments in any of the above locations there are units available significantly below those implied prices. As you seriously trying to asset that the above are average prices in those locations? Come off it. Maybe the Daft rental data is not accurate but (again) I am not making these numbers up they come from your employer and from you, don’t attack the messenger.

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