Daft Property - Irish Property News

Nama may be forced to deliver on social housing... THE GOVERNMENT is considering plans to amend legislation that would oblige the National Asset Management Agency (Nama) to deliver more social housing and public amenities. Nama, created to purge banks of toxic property loans, has purchased some €31 billion of loans connected to thousands of residential properties – loans valued at over €72 billion at the height the property bubble. There is frustration in some circles of Government that the agency is not under any formal obligation to provide a “social dividend”. Minister for Housing Willie Penrose is understood to have written to the Attorney General in recent weeks seeking clarity on how Nama’s terms of reference could be changed to give it a broader remit that goes beyond securing the best achievable financial return for the State. Officials fear the agency is too focused on its commercial remit to generate profits and feel the State is at risk of losing out on opportuniti...

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 ...

NAMA under fire for failing to help house poor people. ENVIRONMENT Minister Phil Hogan is embroiled in a row with NAMA over whether the agency is doing enough to house poor people. The minister said he was unhappy with the toxic assets agency for not selling properties under its control at a discount to his department. These could then be used to house those on council housing waiting lists. But the department was unable yesterday to identify specific areas in need of social housing where NAMA had a stockpile of suitable properties. And NAMA has no specific legal obligation to help to resolve the social housing problem. The law setting up the agency says that one of its purposes is "to contribute to the social and economic development of the State". But there is no mention about handing over specific numbers of properties for social housing. So far just 58 apartments in the Beacon South Quarter, Sandyford, which had been in NAMA, have been purchased by a volun...

Nama might prove 'laboratory' for EU, leaked cable said... THE FIANNA Fáil-Green government considered the National Asset Management Agency (Nama) “might prove to be a laboratory” for other European Union states faced with banks on the brink of collapse, according to the latest batch of diplomatic communications published by Wikileaks. Ireland’s permanent Ambassador to the EU, Rory Montgomery, made the comment to the US ambassador to Ireland, Dan Rooney, at a meeting in Brussels in September 2009. Mr Montgomery revealed the EU “was watching closely” the establishment of Nama. At the same meeting he said that year’s budget would focus on cuts in public sector pay. The cable reports Mr Montgomery’s view was that “Ireland [was] paying too many civil servants too much to provide public services that could be provided for much less.” Mr Rooney met EU commissioner Charlie McCreevy on the same trip. Mr McCreevy had advised the Fianna Fáil-Green coalition to act quickly in es...

They presided over the crash -- but no one was ever fired. An "endemic culture of rewarding failure" in Ireland has meant that not one person in the Department of Finance, the Central Bank or the Financial Regulator's office has been sacked for their role in the worst financial and economic crisis in history. While their former political masters in Fianna Fail were slaughtered at the polls in February, it has been confirmed to this newspaper this weekend that not a single official or adviser was laid off for their failure either to adequately prepare for the crash, or for their failure to deal swiftly with it when it happened. "Nobody in the Department of Finance has been fired since January 2008," a spokeswoman told the Sunday Independent. Friends First chief economist Jim Power said that while many of those who were in key positions during the crash have since moved on or retired, their departure has come at a significant cost to the taxpayer. "...

Government won't write off struggling homeowners' debt... THE Government is not considering a 'debt-forgiveness' scheme to write off billions of mortgage debt for struggling homeowners, Tanaiste Eamon Gilmore confirmed yesterday. The comments came as public demand grows for a mass mortgage write-off. One homeowners' group is claiming 60,000 people face losing their homes unless a solution to the mortgage crisis is found. The clamour follows last week's claim by renowned economist Morgan Kelly that a debt-forgiveness scheme to rescue those in severe difficulty with their mortgages would cost just €5bn or €6bn. But Mr Gilmore yesterday moved to calm growing expectations that a scheme was imminent, saying the Government was not considering "some kind of blanket write-off or mortgage debt forgiveness, as is being suggested by some". It is understood that many senior cabinet figures, including Finance Minister Michael Noonan and Public Expenditure...

Noonan spells out high cost of our rescue... THE IMF and EU will make a €9bn profit over the lifetime of the bailout loans to Ireland. Finance Minister Michael Noonan last night revealed for the first time just how much the international agencies will make if the €85bn in loans are drawn down in total. The British government is also entitled to send auditors and accountants here to check the books as part of its bilateral deal to Ireland, the Irish Independent has learned. It is also insisting that if Ireland ever leaves the euro the UK must be repaid in full and in sterling -- and not in any new Irish currency. The developments come as the IMF-EU bailout team arrives back in Dublin today to begin the latest examination on whether the Government is meeting the terms of the €85bn programme of aid. The progress of public sector reform and changes to wage-setting systems for low earners will be discussed in talks with IMF-EU bailout team. And it also appears likely the Gover...

More pain for PAYE workers as tax hike looks likely... THE GOVERNMENT is on the brink of breaking its election solemn promise not to raise income tax. The tax rise threat emerged as the European Central Bank (ECB) hinted that it is preparing to introduce a 0.25pc hike in interest rates next month -- which will add almost €400 yearly to the average €250,000 mortgage. The blow to struggling homeowners will be further compounded by a new property tax and water charge set to be introduced in the new year. Finance Minister Michael Noonan told the Dail yesterday: "I am not going to rule out any tax initiative, or any tax increase or any tax reduction." He added that the "fraught" condition of our public finances meant he was not in a position to predict take hikes, including income tax. The minister was also forced to concede that EU states such as France and Germany are looking to take an interest in the national assets of bailed-out states such as Ireland. ...

Confusion as Hogan insists 'property tax' will happen... Environment Minister Phil Hogan insisted last night that a new flat-rate household charge -- a precursor to a property tax -- would come in next year. The minister's statement of intent came following confusion created by Taoiseach Enda Kenny and Tanaiste Eamon Gilmore, both of whom said no formal decision had been made. The household charge will be used to pay for local services and will ultimately be replaced by a full property tax based on the value of the home. The Government will also bring a separate water charge, once houses are metered. But the details of this rollout will also have to be sorted out by the Government. Following the split over Enterprise Minister Richard Bruton's proposals to cut wages for low-paid workers, the Coalition was again forced to deny a clash between Fine Gael and the Labour Party. Despite Mr Hogan clearly signalling a new property tax-style charge would be introduced...

Scramble to stem panic after new bailout gaffe... Alarm after Varadkar claims State will need further loans. THE Government last night scrambled to allay fears that a second bailout is on the cards, following damaging comments by a cabinet minister. Transport Minister Leo Varadkar sparked alarm and confusion when he said the Government may need to get new loans from the European Union and IMF next year. Ahead of an anticipated backlash from investors this morning, Finance Minister Michael Noonan's officials insisted the Coalition's firm plan was still to return to borrowing on the bond markets in 2012. The Department of Finance stressed there was no change in the Government's plans, as Mr Varadkar's comments were reported around the world. Mr Varadkar was also left backpedalling after he was reported as saying: "I think it's very unlikely we'll be able to go back (to borrowing on the bond markets) next year. I think it might take a bit longer......

The Government, the EU and a great swindle... In a massive shafting of the Irish people, our own leaders and those in Europe threw away our democracy. Let's play a simple game. Let's put together three stories that emerged last week. And when we do this we will see, more clearly than ever, that we were royally screwed, that we are victims of one of the biggest stitch-ups perpetrated on a country since the heyday of colonialism in Africa. We were stitched up by an unholy alliance of our own Government and autonomous undemocratic institutions within the EU, who seem to be answerable to no one, and other institutions within the EU that are supposed to be answerable to us. Each of these stories, if you read them, will have angered and astounded you. But put the three of them together and you will be fit to be tied. Again. The great swindle begins with the European Commission. You probably don't know exactly what the European Commission is. You are vaguely aware that it ...

'Property mania' at heart of bank crisis... The Nyberg report into the handling of the banking crisis has found that the main cause was the 'unhindered expansion of the property bubble'. The Nyberg report into the handling of the banking crisis has found that the crisis was the result of domestic Irish decisions and actions, and not international developments. The report, written by Finnish banking expert Peter Nyberg, said the main cause was the 'unhindered expansion of the property bubble', which was fuelled by banks using money borrowed from international markets. It said the risks linked to the bubble were undetected or seriously misjudged by the authorities. It said any warnings from the authorities were 'modest and insufficient'. The report said nobody abroad forced Irish households, investors, banks and authorities to take what it called 'unsustainable' financial risks. The report referred to the development of a 'national ...

Only a miracle can save financial system from complete meltdown... MICHAEL Noonan talks the talk, but last Wednesday the only walking he did was backwards. It confirms that the EU is running the show. The light we saw flicker at the end of the tunnel has been blown out and is unlikely to be rekindled any time soon. The new Government had an opportunity to deliver on its election promises. It failed abysmally on one of the key issues. It didn't renegotiate the EU/IMF deal to withhold repayments to the senior bondholders, as promised. It might have been shot down in flames had it persisted with this approach. But it would have preserved its credibility at home. Its proposed bank reorganisation is a whitewash, and only intended to distract us from the cover-up of what is going on at the highest level in Europe. This is not totally unexpected, but it is very disappointing. Weeks before the general election Pat Rabbitte and Simon Coveney said, on separate occasions, that protectin...

I’VE OFTEN referred, half in jest, whole in earnest, to the likelihood that the blame game would get underway and that everyone would start suing everyone else until eventually, the Irish State would have to accept responsibility for the bank crash. And, it looks as if that might happen if the Irish Property Council (IPC) gets its way, as last week it announced its intention to take the Irish State to court. The IPC is an organisation, which represents a broad range of people in the property business, including builders, developers and investors. (And, before you go into hysterics; this organisation represents everyone from the small guy with one little investment property, to the much-hated big-time developers who once owned vast property portfolios.) The IPC’s main bone of contention is that borrowers are the only ones being held responsible for the Irish property crash. Bankers, the financial regulator and the government appear to have got away scot-free, despite the fact that t...

Brace yourself...€200m cuts and tax rises on way. IRISH taxpayers are being warned to brace themselves for further hardship with over €200m in increased charges and spending cuts on the way. Finance Minister Michael Noonan said his 'mini-Budget' would include more cuts and tax hikes. While the Programme for Government contains a pledge not to increase income tax, there are many other indirect taxes which could be increased instead. These include charges for State services -- for example A&E charges. The Government has promised a 'Jobs Budget' within the next three months which will cost €220m to implement. But it has to raise this money in other ways to ensure that the funding from the EU-IMF bailout deal continues to flow. Wage In the Dail yesterday, Mr Noonan confirmed that the Government would need money to pay for measures such as reversing the cut in the minimum wage, halving the lower rate of employers' PRSI and reducing the lower rate of V...

A nation's outrage to drive Cowen out... Poll: public welcomes the IMF but roundly furious at government ‘lies’ THE Taoiseach, Brian Cowen, and his Government are at risk of being ignominiously driven from office, such is the level of anger sweeping the country this weekend. The people have broadly welcomed the arrival of the IMF, are largely indifferent to emotive sentiment associated with a perceived loss of national sovereignty, but are roundly furious at the manner in which the Government has “lied” about the unprecedented events of last week. As the Government now strives to further “spin” itself out of what is, by any measure, a glaringly obvious credibility deficit, its efforts to do so will be hampered by a disintegration of cohesion within its own ranks. This weekend, the Taoiseach is at odds with the governor of the Central Bank; the Minister for Finance is in agreement with the governor and, therefore, at odds with the Taoiseach; and at least two senior Cabinet ministers...

Labour leader Eamon Gilmore today demanded the Taoiseach resign in the national interest claiming Ireland had suffered its blackest week since the Civil War. As formal talks begin in Dublin with the International Monetary Fund (IMF) and European officials, Mr Gilmore said the Government has no authority to strike a deal on a bailout loan. "(Taoiseach) Brian Cowen continues to cling to power and his attitude seems to be that if Fianna Fail is going down, the country is going down with it," the Labour chief said. Mr Gilmore accused Mr Cowen and his coalition Government of laying waste to the economy. "If he will do the honourable thing, an election could be held by the second week in December. A new government, with a fresh mandate, would be in place before Christmas," he said. "In the meantime, discussions or negotiations with the EU and the IMF could continue with their preliminary work, but any final agreement would be a matter for a new government. "Apar...

DAIL SKETCH: THE PATIENT is a basket case and refusing treatment. “This country has not applied to enter a facility,” insisted the Taoiseach, defiant to the last. He is not going to commit poor Mother Ireland into some sort of economic Shady Pines, to be prodded at by bespectacled eurocrats before being released into the real world with a healthy spending plan and an ankle tag. We’re fine. There is nothing wrong with us. It’s our enemies in the international media and other sinister factions who have it in for us. At least that was Brian Cowen’s belief yesterday afternoon. But as he spoke in the Dáil, the men in the white coats circled ever closer in Brussels, syringes at the ready. “Come, come, Ireland, take your fiscal medicine!” Still, the Taoiseach protested. “We are pre-funded up to mid-2011,” he argued, pleading for more time. Wait until the Ecofin meeting is over, he asked. The Opposition listened to him in the Dáil, looking scared, unanimous in their opinion that the Taoiseach ...

1 If €6bn seems like a huge number, it's because it is. The equivalent of more than €1,300 for every man, woman and child in the country, it works out at an average of €4,000 for each one of our 1.5 million households. 2 The Government says the Budget "adjustments" will be split 3:1 between spending cuts and tax increases, ie €4.5bn of cuts and "only" €1.5bn of tax rises. That still means that each of the 1.8 million people still working will each be paying an average of over €800 more tax in 2011. 3 For lower income earners, December 7 is likely to bring a shock. After the Budget, most if not all workers will be paying income tax. For someone on the minimum wage even a 10pc tax rate could cost them up to €1,800 a year. 4 Middle income earners are also going to find themselves squeezed. The Government is likely to hike all of the tax rates. 5 Homeowners are going to remember December 7 for decades to come as the Government finally imposes a property tax and wate...

Cowen issues warning about hairshirt budget: 'Major hole' in tax base must be filled... TAOISEACH Brian Cowen last night set the scene for a hairshirt Budget by delivering a stark warning about the state of the public finances. In an off-script address at a chamber of commerce event in Monaghan, he said he wanted to bring it down to "brass tacks", instead of talking about all the zeros and the billions. He said the Government was trying to fix the "major hole" in its tax base, following the disappearance of one third of revenues due to the economic crisis. "This year, we're spending €50bn and our revenue base is €32bn. Let's put that in context. One half of total revenue is being devoted to the health service presently," he said. Mr Cowen went on to say that social welfare, including pensions, child benefit and disability benefit, accounted for two-thirds of tax revenue. "So if you were to take health and social welfare alone, you woul...