‘Recovery’ in Dublin, Cork housing markets

The Cork and Dublin property markets are making a strong recovery, according to the chairman of Nama, Frank Daly, as the agency gears up to take over IBRC’s loan book.

Speaking at a Association of Chartered Certified Accountants (ACCA) function in Limerick, he said that they had chosen to complete 30 new houses in Forest Hill, Carrigaline in Cork to meet surging demand for houses in the county.

“You might ask why we are funding new housing supply when there is a problem of oversupply in the country. The reality is that the Irish housing market — like most housing markets — is not homogeneous.

“We have been seeing strong demand for new houses in parts of Dublin and Cork over the past 12 to 18 months due to limited supply of existing stock and the fact that the level of housing completions is very low.

“That demand is now being borne out in the various house price indices, and you will see a number of new Nama-funded housing developments commencing over the next year or so in response,” he said.

The sprawling State property agency is also looking at ways to deliver social housing to meet its promise of providing a social dividend to the taxpayer.

Mr Daly said that they had identified more than 4,300 houses and apartments, controlled by debtors and receivers, as being available for social housing.

The agency plans to use Cobh as a pilot project for delivering these homes within the next year after identifying ways to streamline the process of delivering these homes to local authorities, working with debtors, local authorities and housing groups.

“In our case, we have set up a special purpose company to expedite the acquisition of suitable units.

The first homes delivered by this mechanism will include 23 houses at College Wood in Mallow and a further 13 houses at Cooline in Cobh,” he said.

Although, Mr Daly acknowledged that the recovery in property values in Ireland had been limited to prime areas. He said that with an increase in bank finance he expected to see investment in areas outside of the ‘prime Dublin.’

“We work hard to stimulate investor interest and market activity on a broad basis — broad in terms of asset class and geographic location. An audience like yourselves of course will appreciate that investors are canny — they will not be rushed into areas where they do not see value as of yet. But I am confident that they will get there in time,” he said.

While the agency was interested in investing they would only do so where they thought the project was commercially viable.

The latest challenge for Nama will be the IBRC loan book, which due to its size will require the agency to hire more staff. “The acquisition could — depending on what transfers — increase our balance sheet by over 50%.”

“This will bring significant challenges with it, not least those arising from the need to recruit a lot of staff against the backdrop of public sector pay restrictions,” Mr Daly said.