Nama boss: House building here will remain 'challenging' for some time
By Of New Homes In The Mcdonagh 11,000 That 32,000 The Has The Sites Tell End 2021 Delivery Of Delivered Of 2014, On Nama's Own Within With Portfolio The Since Been Agency Will Those Pac Involved
The head of the National Asset Management Agency (Nama) will today say that residential development “will remain challenging” for some time as Ireland’s construction industry struggles with the ongoing inflation crisis.
Chief executive Brendan McDonagh will today tell the Public Accounts Committee (PAC) that the agency’s own analysis shows that the cost of building apartments increased by 18% in the 12 months to the end of 2022.
Mr McDonagh will say that while cost inflation is finally “starting to abate”, the effects of the resounding increases seen across the sector can still be felt, with the price of a three-bed-home increasing on average over the same period by 6%.
Nama has often been criticised over its 14-year history for the relatively low returns it has made in turns of creating affordable housing for the population.
However Mr McDonagh will tell the PAC that the agency has been involved in the delivery of 32,000 new homes since 2014, with 11,000 of those delivered on sites within Nama's own portfolio by the end of 2021.
“As has been noted by several major housebuilding companies in their public statements, there are a number of significant obstacles to delivering additional quantities of housing at the levels Ireland needs,” he will tell the committee, with those obstacles including the “significant” cost of a planning approval, estimated at €3,000 per residential unit, and the “inevitable” judicial review which Nama's clients feel will follow any planning decision delivered by An Bord Pleanála.
“This adds to the timeline, adds to uncertainty, adds to costs and halts the building of necessary housing,” he will tell the committee.
The issue of judicial review is a thorny one for both developers and the Government alike, while the new draft planning bill has been criticised for attempting to stymie access to the courts for objectors to developments.
However, the most recent figures from the Department of Finance indicate that more than 80% of the large-scale housing developments in Dublin which had yet to begin construction at the end of last year had no such legal impediment preventing their construction from commencing.
The committee is also set to discuss a report of the Comptroller and Auditor General into Nama's progress, which indicates that in 2021 the agency sold loans worth €10.5m to two companies at a price of just €265,000, a writedown of more than 97%.
Nama was initially set up in 2009 to take bad property loans off the books of the banks in the wake of the 2008 economic crash, with a view to delivering some return on those broken investments for the taxpayer in the fullness of time.