Flooding market makes no sense, says Nama chief

If Nama undertook a firesale of its assets it would be very damaging for the economies of the Republic and the North, according to the agency’s chairman, Frank Daly.

Nama’s approach to asset divestment was to gauge market appetite and create supply where there is demand, he told the Belfast Chamber of Commerce.

“Sometimes people get impatient with measured approaches and I get the feeling that there is a minority view in Northern Ireland, as indeed there is in the Republic, that Nama should administer some shock therapy to the market by flooding it with supply — the hope perhaps being that such radical treatment will somehow accelerate its recovery.

“A senior figure in the Republic’s property business has recently expressed support for this approach, even if, as he acknowledged, it would mean that Irish taxpayers would have to accept ‘sub-optimal’ prices for Nama assets.

“Our view is that Irish taxpayers have endured enough fiscal pain — €64bn to date — from the property speculation and misadventures of the last decade.

“Flooding the market, either in the Republic or Northern Ireland, makes no sense at a time when demand is still relatively weak and credit availability is limited. We know that banks are not lending or may not yet have the capacity to lend at normalised levels and this remains a challenge.”

He said Nama was a minor player in the North’s residential property market and the agency was working with debtors on both sides of the border to plug gaps.

However, if a debtor refuses to co-operate with Nama, the agency will not hesitate to take enforcement procedures. “Our approach to debtors is the same, regardless of whether they are based in the Republic, Great Britain, Northern Ireland or elsewhere. They all ultimately borrowed from banks which had to be rescued by the Irish taxpayer,” Mr Daly said.