Coalition alarm at Nama property scheme...
THERE IS concern within the Government that plans by the National Asset Management Agency to encourage the purchase of thousands of residential properties could artificially inflate the property market.
The agency wants to introduce a scheme where it would waive 20 per cent of the purchase price of a home on its books if values were to fall further over the next five years.
Nama has suggested the scheme could eventually apply to 5,000 houses and apartments.
However, internal briefing material reveals fears within the Department of the Environment that the move would artificially inflate the market before it has hit bottom.
It could also prevent homebuyers from realising their homeownership aspirations by preventing prices falling further.
Nama is hoping to launch its "deferred purchase" scheme on a trial basis later this year by arranging the sale of about 750 homes.
The agency does not need Government approval for the scheme to proceed, but says it "wants to bring all relevant stakeholders into the process".
In a letter to Minister for Finance Michael Noonan last month, Minister for Housing Willie Penrose warned that "activating the market through incentives . . . appears to run counter" to Government policy.
A Nama spokesman said its plans were "not an attempt to call the bottom of the market".
"Indeed it is quite the opposite, as it enables transactions to take place now which can be flexible enough to accommodate price falls in the future," the spokesman added.
Report by CARL O'BRIEN - Irish Times