Recently, there have been some suggestions about NAMA buying up and renting out thousands of properties from its portfolio. This post goes through those suggestions and explores why it is a bad idea for the taxpayer, in that it amounts to doubling up on the NAMA gamble with developers as well as with the banks.
With the NAMA draft business plan released earlier this week, this post reviews a key topic that remains unaddressed: the low yields on residential property. It finds that yields are clearly lower – far lower – than the 6% assumed both at the start of the NAMA process and now, in its business plan.
This post looks at the numbers behind NAMA in more detail, producing estimates of how much is in different segments of Irish and international property markets. It also critiques the calculation of long-term economic value, which turns out to be based on about 5% of the loan book, and presents revised estimates based on a broader sets of loans and more realistic assumptions.
