But wouldn't it also increase demand, by giving mortgages to those who wouldn't otherwise be getting mortgages?If it leads to NAMA releasing it's stock onto the market it can't but help to give some clarity on prices - but (bearing in mind the AAM rules on discussing house prices) increasing supply can only have one impact on prices...
Not wanting to talk about prices, just what are the practicalities of this type of idea, is it good bad or indifferent. Could it work? Can NAMA get involved in mortgages directly themselves?
The type of properties on offer by NAMA are most likely apartments. People aren't interested in apartments anymore. This plan is going to be no use to people looking to buy a nice second house in a nice area.
What do you mean by 'within reach'? Will it bring the prices down lower?Large 4 bed three story near the sea were over €1m now at €495k and 3/4 bed terraces at €295k so this could bring them within reach where they never could have been before.
THey still have the same mortgage repayment that they originally signed up for.God help those who paid the €1m+ though....
What do you mean by 'within reach'? Will it bring the prices down lower?
THey still have the same mortgage repayment that they originally signed up for.
Today on News-talk I heard talk that Nama is discussing the idea of transferring physical assets into financial assets through the process of providing houses to the public.
OK, but just for a minute, forget about the €1m price and concentrate on the current (pre-NAMA intervention) price of (lets say) €450k. How is this NAMA intervention likely to affect the current price?Within reach of many more people who would have loved the location and home but couldn't possibly have afforded them in the €1m+ days.
OK, but just for a minute, forget about the €1m price and concentrate on the current (pre-NAMA intervention) price of (lets say) €450k. How is this NAMA intervention likely to affect the current price?
My fear would be that it would artificially support or increase this price by bringing more buyers into the market. Next bubble, here we come.
NAMA has more than enough property on its books. It won't be buying up more.Is there any chance NAMA will buy up a few hundred/thousand family homes on the marker as we speak on myhome.ie and re-sell them through this scheme ?
Article in the IT
[broken link removed]
The State agency is in preliminary discussions with Bank of Ireland and AIB to see if they would provide financial support to buyers of properties controlled by debtors in Nama or by receivers. It expects to have “a more detailed engagement” with the banks over the coming weeks.
- If the property rose in value, then the buyer would draw down an additional loan – agreed at the time of the purchase – to cover the 20 per cent difference after several years.
What if the buyer's situation changes...say he/she loses their job - who will want to give them the last 20%..the bank?
This all sounds "nice" but it reminds me of the Common Agricultural Policy in that it almost seems like an artificial floor price in being introduced (given the amount of property owned by Nama). This is government intervention and even though I am a home owner, I feel the sooner we get to the bottom of this property cycle the better....there are many people waiting on the sidelines only too eager to buy once they know/are sure we've reached the bottom.
What is most worrisome is that during the housing boom everybody called for help for the "poor" first time buyers that were being priced out of the market.
A property is valued at 200,00 at the peak, and 100,000 today. So they sell it for 80,000 (100K - 20%), .. i.e below market value?
The extra 20% is only payable if the property rises in value? But it's already worth more than the 80K paid for it, as it was worth 100 at time of sale. So people have got a discount if the price stays at 100K (i.e no rise, so no extra payment needed).
That doesn't work, as why give a 20% discount if the price was fair to begin with? (i.e why give 20% on fair market value?). If the 20% is an incentive then it clearly is unfair on those who want to sell at market rates and not give further discounts... i.e everyone except NAMA.
1. Provision of finance for Residential and Commercial property transactions
• The agency has identified a “key impediment” to residential sales in the current market as “a concern on the part of many debtors that prices could fall further and that, after purchasing, they could therefore find themselves in a position of negative equity for a long time to come.”
With this in mind, NAMA has had “preliminary” discussions with AIB and Bank of Ireland as to how they and the agency may be able to provide financial support to purchasers of residential properties linked to the Agency or its debtors. The agency expects to have “a more detailed engagement” with them on this issue over the coming weeks.
The agency hopes to be able to unveil a product for purchasers of residential properties with the two banks in the autumn which meets the following key criteria; [1] generates sales of property controlled either by NAMA debtors or by receivers, [2] provides an incentive to purchasers to invest at current prices in the knowledge that there will be a mechanism in place which will offer them protection against the risk of negative equity in the future.
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