Nama financed half of all new residential homes built here last year.
However, notes of a recent Nama board meeting point out that the residential market “is not self sustaining” and remains reliant on the agency.
As a result, the notes record Finance Minister Michael Noonan requested at the meeting Nama consider initiatives that could be undertaken to improve the situation.
Minutes of the Nama board’s ‘strategy away day’ meeting held at the Herbert Park Hotel in Dublin in March of this year, that was also attended by Mr Noonan, record that Mr Noonan advised more needed to be done to remove obstacles and blockages in the residential property market system “citing the broken funding model as a case in point with funders remaining risk-adverse following the property crash”.
According to the minutes, Mr Noonan said in the context of the troika-driven programme to repair and build the economy on a sector-by-sector basis, through a series of predominantly supply-side initiatives, he advised that there were still blockages and inhibitors in the property market.
Highlighting the residential property market reliance on Nama, the minutes record of the 3,000 residential units delivered in 2014, Nama had delivered 50% of them.
It said while land banks with the capacity to deliver 8,000 residential units had been sold by Nama mainly in 2014 “there has been no progress in relation to the delivery of any these units in the interim”.
As a result of a question from the board and in the context of providing policy advice to Mr Noonan, the executive has undertaken “to analyse the key reasons why so little progress in terms of residential delivery had been made to the land banks”.
The minutes were released in response to a freedom of information request to Nama. They recorded that “following discussion the board agreed, that given current capacity issues within the market, an overly expeditious exit by Nama could have a detrimental effect on the property market and supply”.
Last year, Environment Minister Alan Kelly announced a vacant sites bill that would include a vacant site levy and ‘use it or lose it’ clauses with planning permission orders to drive development on those sites.
However, the minutes record the vacant sites bill did not constitute a panacea, could not operate in isolation and could be argued to be ‘inoperable — local authorities, who accounted for most of the vacant land, were exempt from the bill as currently drafted.
The minutes also reveal that the board discussed the possibility of UK builders entering the market.
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