Thursday, September 29, 2011
THE bursting of the property bubble may benefit some of the poorer members of society, as apartments built in anticipation of the boom years continuing are sold to social housing projects to cover debts.
Cluid Housing Association, which rents dwellings for as little as €10 a week, is buying 58 apartments from a receiver appointed by National Asset Management Agency.
The flats are located in an unfinished Dublin development, originally marketed as a "new high end retail, residential, office and hotel quarter".
NAMA is accelerating the sale of properties and other assets of indebted investors. The Government is pushing the agency, which controls loans linked to about 10,000 residential units, to unload more dwellings and invest in unfinished developments.
Thousands of properties remain vacant or uncompleted across the country, even with prices crashing 43% after the property boom.
"There is a perception at the moment that there isn’t any housing need because we have all these empty homes everywhere," said Neil Bolton, director of operations at Cluid. "But a lot of people are struggling so the housing need is as strong now as it’s ever been."
Cluid purchased units in the development at an average cost of €177,500. A two-bedroom apartment in the complex is for sale for €340,000, according to property website Daft.ie.
Cluid plans to lease 24 of the apartments at market rates, with the remaining 34 to be leased to those in need of social housing, Mr Bolton said. The association will have a dedicated housing officer working on the project and aims to get a "good mix" of tenants that may include people with disabilities or without fixed abodes, he said.
Cluid is also talking with another NAMA-related developer to buy about 30 dwellings outside of Dublin, he said.
NAMA chief executive Brendan McDonagh said yesterday that a government agency is reviewing residential properties linked to NAMA loans for possible use as social housing.
He warned that while NAMA is linked to one in five unsold newly built residential dwellings, mostly apartments, many may not be suitable for social housing needs because of their type, and concern "over concentration of social and affordable housing" in particular locations.
The state Housing Agency said last week that the number of households in need of social housing rose 75% to 98,318 between 2008 and 2011 as more people can’t afford to pay for their accommodation. Housing waiting lists have lengthened as unemployment tripled since 2007.
"What we are trying to do is marry supply and demand as far as we possibly can particularly through NAMA properties to facilitate the ever growing number of people on the housing lists," Environment Minister Phil Hogan, said earlier this month.
NAMA has "relatively little exposure" to Ireland’s worst category of so-called ghost estates, spokesman Ray Gordon said. Mr Gordon said while the agency expects there to be more transactions of the Cluid nature, the projects must also fulfil NAMA’s "objective, which is to secure the repayment of debt owed to the agency."
NAMA has paid €30.5 billion to buy loans with a face value of €72.3bn from the nation’s banks, chairman Frank Daly said on September 9.
Bank of Ireland chief executive Richie Boucher said two weeks ago his bank isn’t offering mortgage holders write-offs on debt. House prices have dropped 43% since the 2007 peak, according to the Central Statistics Office.
Dublin apartment prices fell 6% in August from the previous month, the largest drop since the property crash, the CSO said. Nationally, prices fell 1.6% in the month.
Almost one in 10 Irish people believe they are "very" or "quite" likely to become homeless, according to a Ipos MRBI survey carried out earlier this year for Focus Ireland, a charity for the homeless. While house prices continue to fall, the average asking rent in Ireland in July was €823 a month, the same level as a year earlier, Daft, Ireland’s largest property web site, said in August.
With more people unable to make mortgage payments, Focus Ireland helped 5,300 homeless people or those at risk of homelessness by July, more than the total 2008 figure, said Joyce Loughnan, head of the charity.
"Finally some of this stuff is starting to shift and we are starting to put to use some of these fantastic assets, which are here lying vacant and is a squandering of our money," Ms Loughnan said. "What is costing us all our money is these buildings so let’s put them to some good use."
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