Call for banks to play their part in housing recovery

IRELAND’s discredited banks still hold a few keys to recovery in the housing market — and one is for them to agree settlement figures for those homeowners trapped in a negative equity bind.

That need, which has proved effective in the US, is being stressed in an address delivered today by the president of the Irish Auctioneers and Valuers Institute, Edward Carey. He also calls for the banks to pass on the full ECB interest rates cuts to buy-to-let investors.

According to Mr Carey: “International investors have little confidence in Irish banks and their level of exposure to commercial debt. Until the banks come clean and write down the extent of these and other toxic debts, the market is effectively held to ransom.”

“The only stimulus coming from Government is a soft and almost genteel approach to the banking chaos,” he asserts, “what we need is a pro-active plan of dealing with the writedowns such as the creation of a bad bank and to move on from there,” he adds.

Ironically, his comments will be delivered to hundreds of largely-idle estate agents, members of the IAVI, in the hallowed halls of Dublin’s Burlington Hotel, sold as one of the country’s largest property plays in 2007 for €288 million, and now joining Sean Dunne’s Dublin 4 equally costly hotels’ sites as costly emblems of misplaced developer optimism.

The day-long, international speaker-packed IAVI annual conference meeting is also in stark contrast to those of the boom years, when it held three-day long conferences in places like Barcelona, Lisbon and Nice.

“There are two things that the banks could do right now to encourage transactions and activity in the market place. Firstly, they should cease withholding ECB rate cuts from buy-tolet investors and secondly they should introduce a scheme which would allow some homeowners with negative equity to sell their own properties for an agreed settlement figure, an incentive which has proved a successful model in the US. We will meet lenders shortly and will be lobbying strongly for these changes,” said Mr Carey.

Calling for his own profession to show innovation, Mr Carey notes “it’s do or die. We can’t afford to let apathy, fear and disenchantment blind us to the solutions that must be out there”.