A Bad Idea, or ‘How to turn NAMA into a developer bail-out also’

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.

Another look at yields on Irish property, for the benefit of NAMA

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.

The importance of getting NAMA’s core assumptions right

This post examines three key assumptions underpinning the assertion that NAMA only requires a 10% rebound in property values in 10 years to ‘wash its face’. It looks at the importance of measuring the fall right, questions the yield given for NAMA’s loan book and raises the possibility of any yield correction coming through downward rent adjustment, not a rebound.

Do the NAMA figures add up? A broader and more realistic assessment of long-term economic value

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.

NAMA: Top Five Facts

This post sets out the key facts about NAMA, as per the Department of Finance’s supplementary information, published on Wednesday. It goes through the amount lent, the number of deals, the loan-to-value, the estimated fall from peak so far and NAMA’s proposed ‘plateau’ level, before raising some issues to be dealt with in later posts.

Environmental Pillar workshop on NAMA, the Irish property market and economic sustainability

From one EP to another! Following Electric Picnic at the weekend, which featured Leviathan political and economic discussions as well as more food stalls and music acts than you can shake a stick at, today it was back to business and off to another type of EP altogether. That was the Environmental Pillar, part of […]

Notes on NAMA: Haircuts and house prices when I retire

NAMA will purchase assets based on current market value and longer term economic value. This post discusses both of these frameworks, with particular emphasis on the importance of the yield chosen by NAMA as ‘normal’, and outlines the impact NAMA may have on property prices for the next generation or two.

It’s so cold and it’s so broken, Board Snip Nua!

I’ve always had a soft spot for song parodies, as longer established readers of the blog will probably ruefully attest. My last foray into this territory with my economic hat on was “Brother, Can you bail out my bank?” in the midst of our global financial excitement last Autumn (although I did try my hand […]

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