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Republic’s toxic assets 'could cause Northern Ireland property prices to nosedive'
Tuesday, 7 July 2009
Northern Ireland property prices will nosedive if the Republic's new toxic assets agency dumps developments on the market, it has been warned.
Finance ministers from both sides of the border are to hold emergency talks over fears Northern Ireland could be swamped with repossessed homes and offices. The spectre was raised at the top-level meeting of the North/South Ministerial Council in Dublin.
Taoiseach Brian Cowen said there were concerns about the number of Northern Ireland properties which will be taken over by the Republic's National Assets Management Agency (NAMA).
The agency was set up to recoup nationalised bank losses for the Republic through the selling off of developments that collapsed during the property crash.
“Obviously some of these assets are located in the Republic, in Northern Ireland and other jurisdictions as well,” he said.
“It's important that we fully agreed in our discussions that both (finance) ministers would meet to consider the implications over the period ahead.
“It's obviously a matter of co-ordinating policy decisions.”
Northern Ireland First Minister Peter Robinson said his Finance Minster Sammy Wilson would meet with his counterpart in the Republic Brian Lenihan in an attempt to stave off any threat to Northern Ireland's house prices.
“There are assets which are being held by NAMA which impact upon Northern Ireland, those disposals need to be handled in a way that don't swamp the property market and impact adversely on property prices in Northern Ireland,” he said.
Deputy First Minister Martin McGuinness said it is important that both finance ministers work together to ensure proper management of the assets.
“This could have very severe implications for our property market in the North,” he said, after the meeting at Farmleigh House in Phoenix Park.
The Republic's government also confirmed it will pay €9m (£7.7m) towards the new A5 Aughnacloy to Londonderry and the A8 Belfast to Larne roads.
Mr McGuinness signalled that the Stormont Executive was worried the cash would no longer be made available because of the scale of the economic crisis in the Republic.
But Mr Cowen said he was committed to what he branded flagship projects.
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Comments
42 Comments
Bren, several inaccuracies I cant let go. Unemployment in NI is at 6.2 %, lower than the average uk which is 7.2 % and much lower than the rep, which is 10.6%. The uk contribute 4 billion to the eu, and all of the uk receive funding for various programmes. All uk taxpayers are funding the eu, and ni is a useful conduit for the government to use to channel funds into the central exchequor.the rep have received over 20 billion euros from the eu! still you are almost bankrupt, and you thinkof a ui?
Posted by stephen | 09.07.09, 16:08 GMT
bren, NI cant afford itself, we depend on the uk, the rep cant afford us either. You have finally grasped what I have been repeatedly saying, ni within the uk is the only viable option.the rep govt debt wll rise to around 70% of gdp. After a record drop in the economy, and soaring unemployment, the rep are in deep trouble.Also, losing triple a status results in higher costs for borrowing. All not good! ni have lowest unemployment in the uk, and I expect uk to drop rates further, as they can!
Posted by stephen | 09.07.09, 15:37 GMT
Stephen 1
"tax cuts/rises? theres two quite easy remedies depending on the particlular sector."
The Republic CAN raise taxes, they just did. I think you are confusing fiscal policy with monetary policy.
Any other ideas?
Posted by Scamallach | 09.07.09, 14:13 GMT
stephen 1 Northern Ireland is the largest recipient of EU funds per head of the population in Europe, the Republic of Ireland is now rightly a net contributor to the EU. Northern Ireland is heavily dependant on the British subvention, more than 25% of the population do not work (before you all begin to deny it think of all the people you know on disability), the majority of those who do are in the public sector.
These are the real fiscal issues stopping a United Ireland, when will NI fix them?
Posted by Bren | 08.07.09, 17:34 GMT
Stephen 1, To quote the late American comedian George Burns "What a shame that all the people who know how to run the country are hairdressers or driving taxis". I wonder which of those are you Stephen, when you are not spending hours posting to the BT or financial jet setting ?
Posted by Patrick | 08.07.09, 13:52 GMT
Stephen 1
I am from the Republic of Ireland, not NI. My country is a free democracy and a committed member of the great evolving European family. Unlike you I live in the real world of 2009 and not the past. I lived in London for 8 years, was tertiary educated there, and have many English friends.I also lived in Melbourne for 12 years (over 100 nationalities). Neither your various assertions nor denials ring true. Your bigoted mind is made up, so why confuse you with the facts.
Slan go foill.
Posted by Evergreen | 08.07.09, 12:48 GMT
bren, on the contrary, you are heavily dependent not only on foreign investment, but also eu funding, and ultimately the imf. They were scathing about the mismanagment of your failing economy. No wonder. Gordon Brown was/is (for the record) also abysmal, the selling of UK gold reserves years ago was nothing short of scandalous at the price.Scamallach, tax cuts/rises? theres two quite easy remedies depending on the particlular sector. The widespread crisis is manageable, some better than others.
Posted by stephen 1 | 08.07.09, 11:00 GMT
evergreen, in your haste to pigeon hole me, a common trait of narrow minded backward individuals from ni, you ignore reality. I have been in international finance and been travelling for over 12 years. I have dealt with people from all over the world, not just the small island you are so hung up on.I have no hatred for any country, I am merely pointing out that a ui is unachievable and unrealistic in the extreme.That fact is ignored by you simply on silly hang ups about Britain.I rely on myself!
Posted by stephen 1 | 08.07.09, 10:40 GMT
It is hard to accept that Stephen 1 is in "international finance" Perhaps he got burned by someone from the Republic. But even that does not account for his blind hatred for a country and people that almost certainly never did him any harm.
Any half astute businessman will often deal with the devil himself if necessary. He will also recognize the limitations of blind trust, loyalty, and adulation to any self perceived "superiors" who may dump him in self interest at the drop of a hat.
Posted by Evergreen | 08.07.09, 00:24 GMT
Stephen 1 - name us one thing that the UK can alter to get them out of this hole that the Republic can't, apart from interest rates and printing money to devalue the currency.
Posted by Scamallach | 07.07.09, 19:33 GMT
So NAMA is not going to dump all this property on the market at once. Fair enough. But now everyone knows there is £15-£20 billions worth of supply coming onto the market sometime.
And with the Republic's finances being watched closely by international lenders they will have to demonstrate that the developers' loans are being dealt with.
Posted by Norseman | 07.07.09, 19:29 GMT
if houses were built for people to live in and not as a business to make hugh profits then everyone could afford one
Posted by albert | 07.07.09, 17:01 GMT
it just gets better
you could not write it
i know and have worked for developers and the only concern is profit
the days of helicopters and lionel ritchie are gone get out of your 4x4 and do a days work
ha ha ha
scumbag millionaires the credit crunch edition out soon on dvd
you only need one home
Posted by whowouldbuyahousefromyou | 07.07.09, 16:57 GMT
So stephen 1 you know then that the consumer spending that funded the boom was cheap USD raised and hedged after September 11th when the US reduced their interest rates to what were historic lows.
It's ironic that the Republic's membership of the Euro was the cause of the worst excesses of the boom as much as it was the saviour from the bust.
With one of the lowest debt to GDP ratios in the world, backed by a reserve currency, we are very fortunate! The UK is in the opposite position.....
Posted by Bren | 07.07.09, 16:51 GMT
actually as someone who owns a company and works internationally in corporate finance, I know more than most how the rep is dependent on the eu for its escape route. the correction is coming, but the rep is unable to cushion the blow as it has no control. The uk will cut budgets inevitably, but retain control as always, of interest rates and associated fiscal policy. The housing markets were always false, and the get rich quick merchants will suffer most, ie the bridging financiers in building.
Posted by stephen 1 | 07.07.09, 16:22 GMT
Michael Falkes, Jim is right, NAMA is taking developers loans off the banks and paying the banks the estimated real value now for money that was due to take years to get back from the developers.
It's pretty unlikely there is going to be a fire sale and it's not individual houses that are involved it's developments and land banks.
The idea is to get credit flowing again from the banks, but to be honest most of this is decided in Europe with fiscal easing anyway.
stephen 1 you're barking mad!!
Posted by Bren | 07.07.09, 15:21 GMT
"Deputy First Minister Martin McGuinness said it is important that both finance ministers work together to ensure PROPER MANAGEMENT OF THE ASSETS."
Hmmm, makes you suspicious. Proper management surely means selling them at a lower value to get cash in and wipe off as much debt as possible.
What other plans do our elite have for these assets? Assets I may add that our young can buy at a much cheaper price than in 2007 giving them a chance of a life.
Posted by The Real Liam | 07.07.09, 15:15 GMT
When people realize that a house is not an investment but a place to live then the market will stabalize at an acceptable level. The average price should be x5 the avarage wage.
Posted by Robert | 07.07.09, 14:50 GMT
So, affordable housing is a "spectre" and a "threat". Good to know that the lunatics are still in charge of the asylum.
Posted by Pete | 07.07.09, 14:35 GMT
Gov't must control release of these properties otherwise all the additional will push prices down and affect the majority employer here of the building sector. We need over inflated building capacity to provide jobs. The tax payer should continue to fund these delinquent assets and perhaps they can be gifted to executives as bonuses, for their part in their purchase.
Posted by Anne E. Hay | 07.07.09, 14:30 GMT
42 Comments