Presumable a lot of these houses are held by developers in anticipation of Nama? But who is going to buy them?
Local Authorities are now planning on buying them 'on the cheap' according to reports
Not sure how the NAMA thing will affect the properties, but maybe the government are doing a share buy-back job to take supply out of the market. This may stimulate demand / increase prices.
So they are trying to create a second bubble, 'cos the first bubble didn't cause enough damage?
The government does not have the money at the moment to buy enough properties to make a difference. However they are looking at other ways of reducing supply of properties in areas where there is a demand for housing
The current proposal is for the taxpayer to lease properties from developers for 10 years. They will be maintained by the local authorities and at the end of the lease period handed back to the developers in good condition. This will have the benefit of providing cash flow to developers from the taxpayer and income to Nama.
Theoretically these properties could then be used for temporary social housing once fitted out and furnished by the LA with the tenants evicted at the end of the lease period but this will run into opposition from the landlords who currently receive €500,000,000 per annum in rent allowance payments so it is more likely that most will be kept vacant.
Its not yet certain whether they will get away with this but most developers have taken stock off the market in the last two months in anticipation of the leasing bonanza. Another option would be for NAMA to hoard the properties in areas where there is demand for a few years.
The government is also in discussions with banks in which they have influence in relation to a ban on mortgages of less than €175,000. BOI has already adopted this policy.
Frontline
Pat Kenny :Minister, We've been talkin about your plan. We still don't know what your plan is. What is your plan.
Minister for Housing: Well at the moment, em, uh, on my desk in the custom house we have returns in from all of the local authorities of Ireland to say that there are 56000 people on lists, eh...
PK: Yeah but whats your plan? We've heard that earlier. Whats your plan?
TD: My plan is that we avail of the opportunity thats there at the moment, eh, to long term lease many of these houses that are available in the different towns and villages right around this country and including the city of Dublin. and...
PK: So, you're going to lease these from the developers..
TD: from developers, ah, ah, ah, or from the banks, or through NAMA which we are in discussions with aswell. And eh, they will be leased....
PK: But NAMA has got to be independent. It can't be at the whim of politicians. NAMA will make decisions on the 6 options outlined depending on whether they're truely commercial decisions. They are not going to be listening to you, telling them to lease from developers that they might choose to force into bankruptcy ..
TD: They are listening to me because I am in discussions with NAMA on the basis of a social dividend for the excess houses that are there.
PK: I don't think thats part of NAMAs brief is it.
TD: Well it is, because I am in discussions on it, with them on it, eh...
PK: Constantine, you're smiling at this...
CG: I certainly wish that Angela Merkel and the rest of the EU is listening to this because the whole sham has now been exposed right there in terms of NAMA.
We wouldn't want local authorities to buy anything at a reasonable price now would be. Look forward to to the prices if sold to local authorities being inflated by the builders, who have the ear of the government and hence the local county councillers in their hour of need.