Mr. Brendan McDonagh:

The reality is that if a debtor owes us a huge amount of money, he wants to sell the property for the best value he can so he can pay off as much of his debt as possible. If there is a receiver in place, the receiver has a legal obligation to take the best price. That is a legal obligation so he has to have a very good reason for not accepting the best price. Both the receiver and debtor are incentivised to get the best price for it. Our obligation, like any secured lender, is to decide whether to release our security on the basis of the price that is offered.

The Deputy spoke about the local authorities' reluctance and how sometimes they said the property was suitable or unsuitable, be it a house or apartment. We offer what is available in a portfolio, whether it is houses or apartments, one-bedroom or two-bedroom apartments and so forth, and ask if it is any use to them. They can make their own decisions on whether they will take it on that basis.

The Deputy referred to the cost of building. I refer him to page 20 of my presentation. The Society of Chartered Surveyors benchmarked the building costs. We saw that and examined it ourselves with our in-house quantity surveyors and we have seen what our debtors are doing as well. It is a reasonable representation of the costs involved in terms of build out. It takes account of the VAT that goes to the Exchequer, which is approximately €30,000 on a typical €300,000 house. Local authority costs, planning costs, finance costs and so forth amount to approximately €46,000. The site cost in Dublin is typically up to €40,000 per unit on average and less than that outside Dublin. It is well benchmarked.

We often hear people say that the big issue is driving down the cost of construction, but the reality can be seen in one of my charts. One would have thought that the cost of construction would have fallen dramatically during the recession, but it did not. Effectively, it was flatlined. The reason is that many of the costs of construction are fixed. These are effectively union agreements on pay rates, which have not changed.