Paul Murphy (Dublin South West, Anti-Austerity Alliance)
Link to this: Individually | In context | Oireachtas source

72. To ask the Minister for Finance the number of acres of residential land the National Assets Management Agency controls directly or has an interest in through loans owed to it by county. [6302/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised, by NAMA, that through its loans it has an indirect exposure to approximately 2,800 hectares of residential development land in Ireland.  This land is owned by NAMA debtors or, in the case of enforcement, is managed on behalf of debtors by duly appointed insolvency practitioners.

Section 10 of the NAMA Act requires NAMA to obtain the best financial return for the State, deal expeditiously with the assets acquired by it and protect or otherwise enhance the value of those assets. In line with this, NAMA is working with debtors and receivers to identify, where commercially feasible, opportunities to bring forward new residential development on this land.  In this respect, NAMA has indicated that it expects to be in a position to fund up to 20,000 new residential units in Ireland by 2020, subject to commercial feasibility.  This equates to approximately one-fifth of expected demand for housing over that period, which means that NAMA can make a very substantial contribution and that other sources of new output are also needed.

Reflecting both demand and economic viability, over 90% of the units which NAMA expects to fund will be in Dublin and the neighbouring counties of Wicklow, Kildare and Meath.  NAMA's funding is focused in particular on the starter home market.

NAMA is already making significant progress in this respect:

- Since 2014, it has funded the construction of 2,700 new residential units in Ireland on residential development land within its portfolio (of which, 2,400 are in the Dublin area). 

- In addition, on development land identified in Table 1 below, a further 3,300 are under construction (of which 2,700 are in the Dublin area);

- Planning permission has been granted for an additional 4,800 units (of which 4,200 are in the Dublin area);

- Planning applications have been lodged for 4,300 units (of which 3,500 are in the Dublin area);

- New applications will be lodged within the next 12 months for 7,237 units (of which 5,800 are in the Dublin area).

In some areas within Dublin and the wider Dublin area development remains unviable for commercial, planning and infrastructural reasons, with the latter being a major issue in certain areas in which development might otherwise be economically viable.

Outside the Dublin area, there are very substantial commercial, planning and infrastructural barriers to new development.  Much of the development land within NAMA's portfolio outside the major urban areas is, therefore, unlikely to be viable within the next five years without substantial progress by public authorities in terms of putting in place the necessary planning frameworks and addressing public infrastructure deficits, for example, roads, water, sewerage, transport and schools. 

Where such infrastructure investment takes place it should be targeted at those areas in which development is likely to become commercially viable over the medium-term partly as a result of this investment.  Targeting infrastructure investment with consideration to the commercial viability of development is extremely important due to the fact that in many parts of the country, residential development will not become commercially viable over the medium-term even if planning and infrastructural constraints are addressed due to a lack of demand or other legitimate reasons.

Table 1: Breakdown by county of residential development land controlled by NAMA debtors and receivers as of April 2016

Paul Murphy (Dublin South West, Anti-Austerity Alliance)
Link to this: Individually | In context | Oireachtas source

73. To ask the Minister for Finance the number of residential units the National Assets Management Agency owns, controls, or has an interest in, directly or indirectly, and the number of such residential units that have been sold on to investment funds and to real estate investment trusts since the Agency was established. [6303/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

NAMA does not own or sell properties. NAMA has acquired loans.  The properties that secure these loans are owned by NAMA debtors and NAMA's legal relationship to those properties is similar to a bank which holds security over a person's house that has a mortgage.  NAMA, unlike other lenders, generally has no residential mortgages, owner-occupier or buy-to-let, in its portfolio except in a very small number of cases where it holds debtor principal private residences as security for loans.   

NAMA requires that the sale of properties by debtors and receivers be openly marketed to ensure that the best available price in the market at the time of the sale is achieved.  In its capacity as a secured lender, NAMA has approved the sale by debtors and receivers of 12,781 residential property units since inception.  88% (11,219 of the 12,781 units) were sold on the open market by NAMA debtors and receivers in individual sales transactions to individual house buyers. 

The remaining units, 1,562 units, (12% of the total) were sold on the open market by NAMA debtors and receivers as part of larger group or portfolio sales.  The properties that were sold in groups or portfolios were typically already tenanted and vacant possession was not sought prior to the sale. Such portfolios are, as a consequence, generally acquired by investors seeking long-term rental streams, rather than seeking to sell the properties in the short-term, and therefore existing tenancy arrangements tend not to be impacted by such sales.

I am advised by NAMA that there are approximately 6,700 residential properties currently within the NAMA portfolio.  Just over 6,000 of these units are currently occupied by tenants.  The remaining 700 units are actively on the market for sale by their debtors and receivers.

It should also be noted that, in addition to repaying its debt, NAMA generally uses the proceeds of sales to fund the construction of new homes on a commercial basis.  This is in accordance with NAMA's Section 10 obligation to seek to protect or enhance the value of its acquired assets and NAMA's sales, in this way, contribute to an increase, not a reduction, in market supply.  New supply funded by NAMA is typically sold on the open market in individual lots to individual house buyers.