Thanks for raising this. Far more attention is needed on both the indirect economic effects of NAMA, the direct costs and conflicts of interest inherent in NAMA itself and its impacts on the ground, on property markets and land use.
Hanging over the whole thing is that most of this mess was created by not more than 200 individuals in the property, banking and public sectors.
It should be a priority for the ODCE and Fraud Squad to complete its investigation into the Anglo Irish Bank and to report on it to the public.
I should hasten to point out that I’m not the first to think of Ireland after NAMA at all… Now would probably be a good time to mention the “Ireland after NAMA” blog!
Dave
,
Hmmm. It seems to me that the main purpose of NAMA was to prevent a property crash, or what the government at the time called a “fire sale”. If NAMA bought up most property loans, and cornered the market, then a property price crash could be avoided. The banks and developers would stay solvent, and the government could wait for the so-called liquidity crisis to pass.
NAMA has actually been pretty successful in preventing a property crash. Prices have fallen somewhat, but nothing like enough to make housing affordable for ordinary people, which is where we might expect prices to eventually settle. In particular, house prices have fallen least in rural areas, despite the fact that the oversupply is greatest there. Arguably, NAMA has had its greatest success in rural Ireland, by keeping housing costs high.
NAMA is having a huge impact on the real economy by keeping the cost of property artificially high. This makes Ireland an extremely expensive place to live and do business, and undermines our competitiveness. This seems to be the main effect of NAMA on the real economy.
Hi Dave,
Thanks for the comment and I certainly would agree with the importance of price competitiveness (I had a post on it only a couple of weeks ago).
However, on NAMA’s impact, land values are down up to 98% in some cases, commercial property is down 50-60%, while residential property is down by up to 50% in urban areas, where transactions are happening, and by 35% elsewhere… with house prices still falling. So if NAMA has been successful in preventing a crash, I wonder what things would be like if it weren’t a success!
Ciaran
,
excellent article, but anyone who knows anything about wind farms knows they are worse than useless.
[…] Puis à partir de 2008, les recettes ont chuté, mais le gouvernement a attendu fin 2009 pour promulguer des baisses de dépenses significatives. Pire, le gouvernement a fait voter une loi appelée « NAMA » organisant le « sauvetage » de son système bancaire et surtout instaurant une garantie illimitée des comptes des déposants. Les conséquences sont visibles à l’oeil nu : un écart de presque 30 milliards (29,2 pour être précis) d’Euros entre les recettes et les dépenses publiques, soit 18% du PIB. Mais il serait faux d’imputer ces 30 milliards à la seule loi NAMA : pour l’instant, l’état irlandais n’a déboursé « que » 7 milliards pour renflouer ses banques au titre de cette loi. Le déficit courant est quant à lui de l’ordre de 20 milliards (source) […]
C.Flower ,
Thanks for raising this. Far more attention is needed on both the indirect economic effects of NAMA, the direct costs and conflicts of interest inherent in NAMA itself and its impacts on the ground, on property markets and land use.
Hanging over the whole thing is that most of this mess was created by not more than 200 individuals in the property, banking and public sectors.
It should be a priority for the ODCE and Fraud Squad to complete its investigation into the Anglo Irish Bank and to report on it to the public.
Ronan Lyons ,
I should hasten to point out that I’m not the first to think of Ireland after NAMA at all… Now would probably be a good time to mention the “Ireland after NAMA” blog!
Dave ,
Hmmm. It seems to me that the main purpose of NAMA was to prevent a property crash, or what the government at the time called a “fire sale”. If NAMA bought up most property loans, and cornered the market, then a property price crash could be avoided. The banks and developers would stay solvent, and the government could wait for the so-called liquidity crisis to pass.
NAMA has actually been pretty successful in preventing a property crash. Prices have fallen somewhat, but nothing like enough to make housing affordable for ordinary people, which is where we might expect prices to eventually settle. In particular, house prices have fallen least in rural areas, despite the fact that the oversupply is greatest there. Arguably, NAMA has had its greatest success in rural Ireland, by keeping housing costs high.
NAMA is having a huge impact on the real economy by keeping the cost of property artificially high. This makes Ireland an extremely expensive place to live and do business, and undermines our competitiveness. This seems to be the main effect of NAMA on the real economy.
Ronan Lyons ,
Hi Dave,
Thanks for the comment and I certainly would agree with the importance of price competitiveness (I had a post on it only a couple of weeks ago).
However, on NAMA’s impact, land values are down up to 98% in some cases, commercial property is down 50-60%, while residential property is down by up to 50% in urban areas, where transactions are happening, and by 35% elsewhere… with house prices still falling. So if NAMA has been successful in preventing a crash, I wonder what things would be like if it weren’t a success!
Ciaran ,
excellent article, but anyone who knows anything about wind farms knows they are worse than useless.
Irlande, crise étatique | Contrepoints ,
[…] Puis à partir de 2008, les recettes ont chuté, mais le gouvernement a attendu fin 2009 pour promulguer des baisses de dépenses significatives. Pire, le gouvernement a fait voter une loi appelée « NAMA » organisant le « sauvetage » de son système bancaire et surtout instaurant une garantie illimitée des comptes des déposants. Les conséquences sont visibles à l’oeil nu : un écart de presque 30 milliards (29,2 pour être précis) d’Euros entre les recettes et les dépenses publiques, soit 18% du PIB. Mais il serait faux d’imputer ces 30 milliards à la seule loi NAMA : pour l’instant, l’état irlandais n’a déboursé « que » 7 milliards pour renflouer ses banques au titre de cette loi. Le déficit courant est quant à lui de l’ordre de 20 milliards (source) […]
Info ,
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