The Chairman of NAMA, Frank Daly, has suggested that NAMA is examining the prospect of providing financing to fund commercial and personal property deals. Certainly, the recent Allsop auction of properties that took place at the Shelbourne Hotel conjured up a picture that indicates that the property market may be approaching an ultimate minima in terms of prices based on fundamental value.
Although houses are more affordable for younger buyers, the problem with availability of credit pertains. It is clear that, despite an unemployment level of one-sixth, there remains a solid foundation of young professionals who would be prepared to purchase modestly-priced property provided financing were to become available.
A natural reticience for property purchasing will remain for a number of years, so it is important to encourage younger people to be allowed to enter the property market provided they meet certain criteria. If someone saves 10-15% of a mortgage, that should be regarded as a solid down-payment if they also have a permanent employment contract. For financial normalcy to return, banking institutions should ideally return to an era where provision of credit is neither given out in a lax or an overly strictly-controlled manner. In this regard, I believe the moves by NAMA to consider financial support provision as outlined are to be welcomed and closely considered, provided that due care is afforded with respect to preventing any second property ‘bubble’ returning, even briefly, as a consequence.
