Nama Report: Developers ‘hoarding’ home sites

Developers “hoarding” land are delaying building badly needed houses to benefit from rapidly rising house prices, the chief executive of Nama has said.

Nama chief executive Brendan McDonagh and Nama chairman Frank Daly.

Brendan McDonagh said that only a small fraction of the residential sites Nama has sold to developers since 2010 for housing have actually been built on.

Mr McDonagh was speaking to reporters alongside outgoing Finance Minister Michael Noonan and Nama chairman Frank Daly at the presentation of Nama’s 2016 annual report.

Mr McDonagh said the agency had monitored the sites it sold for housing development after claims there was not enough residential land available to build on.

The sites could support 50,000 housing units, but only 3,200 units, or 6% of the total, had been built on or were in the process of being built.

“A lot of people ask what is the reason for that. There is clearly some infrastructural issues,” he said, adding that, with house price rising strongly, site values are soaring.

“By hoarding land, you actually pick up the increase in value without actually doing very much to it. So effectively, that’s a huge issue in my book,” Mr McDonagh said.

The benefits to developers waiting to start building were clear.

“The maths are very simple,” he said.

Asked whether developers hoarding land should be “named and shamed”, Mr McDonagh said he wanted to establish the reasons sites were not being developed for the country’s growing population.

Mr Noonan, who is preparing to step down in the coming weeks, said that legislation to stop developers hoarding land had to be delayed on legal advice but that the measure could be introduced after owners had been given an adequate notice period. He said the aim of the vacant site levy would “from a practical point of view” encourage people not to hold onto development land.

The Oireachtas had approved a vacant site levy but under legal advice, its implementation has been delayed.

Separately, Mr McDonagh said Nama will focus on its major work on Dublin’s Poolbeg Strategic Development Zone (SDZ) when Dublin City Council has approved the status of the SDZ. The lands could support thousands of homes at one of the best sites in Europe “given its location and closeness” to Dublin and its economies of scale.

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