We’re seeing some amazing changes within the Irish property market – NAMA, bank nationalisations, bank bailouts, developers going bankrupt, builders being liquidated, and tycoons fleeing the country.
Right now, it’s like everything has been thrown up in the air, and we’re waiting to see where they’ll land once things (eventually) settle down.
This distressed property is moving between developers, banks, and NAMA, round and round, and where it stops, nobody knows.
However, it’s my prediction that none of this distressed property that’s nominally moving hands between all those players now will end up being owned by anyone other than the original owner before all this began.
Have you ever seen “The Field“? Do I need to say any more?
It’s happening already:
- Example 1 – Farm of 67 acres draws just €1 bid as hostility sinks auction
LOCAL ANTIPATHY torpedoed an auction of 67 acres of farm land at Crossakiel, near Kells, Co Meath, yesterday.
The land was up for sale by a receiver appointed by ACCBank but it attracted one bid of just €1. Farmers who attended the auction indicated they did not want the land sold.
- Example 2 – Flat market: No bidder for Donegal apartments
THERE WERE heated scenes at a public auction in Co Donegal yesterday when no bidder emerged for 47 partially completed apartments that failed to make the reserve of €550,000.
There was a Garda presence outside the premises with about 100 builders and subcontractors attending the auction in Jackson’s Hotel, Ballybofey. Former workers on the site protested outside.
- Example 3 – Investors find Irish market shut
FUND manager Josh Brayman visited Ireland earlier this year with a chequebook, ready to snap up bargains in the Irish property market. A few months later, he left frustrated and empty-handed to hunt for deals elsewhere. He’s not alone and he blames NAMA for his problems.
More and more investors are circling the commercial property market here but they can’t seem to seal the deal.
Property Developer Black Sox
Back in April 2009, I wrote how NAMA was an ingenious way for Fianna Fail to help their property developer buddies back on their feet at the tax payers expense, How NAMA is the perfect solutions for property developers to come up smelling of roses, again.
In that post, I wrote about a (still very likely) way for property developers to use NAMA, the banks and the government to get refunded and to get back into the property market again.
One premise of that theory is that the developer would be able to by property at less than not only the book value, but also less than market value as well.
And how will they do this?
Tactics used in the above examples will be employed to “discourage” other people other than the original owners from buying back the property. More, I think it’s very likely that the “property developers union” has already arranged an agreement that no property developer will buy from NAMA or the banks any property previously owned by any other union member.
By NAMA being sluggish to facilitate purchases of Irish property by outside interests, it’s like there’s a little bit of insider help going on as well.
So, you’ll never see Bernard McNamara buying any property from NAMA that was previously owned by Liam Carroll, and vice versa.
Below cost selling
With such agreements in place, and with NAMA supposedly keen to sell the property on their books in order to supposedly make some money on the taxpayers behalf, the property could very likely be sold at below cost.
Why? Because there’ll only be one bidder for each property being sold. The original owner!