Housing Crisis | NAMA funds €1.5m ‘trophy homes’?

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27 July 2015

In the following article in Bloomberg Business “Irish Trophy Homes Are Back With the Property Bubble a Distant Memory“, a NAMA-funded development of luxury €1.5m homes is discussed. What is not mentioned is the % of social and affordable housing to be provided on the site in Howth, or any lower-cost affordable entry-level homes that may be part of the scheme.

Not only are only a fraction of NAMA units being availed of for social housing (see post below), but it also appear that NAMA are using their considerable financial clout in funding developments of niche trophy homes for wealthy buyers in the midst of a housing crisis. The level of once-off commissioned and self-built homes has experienced a 60% fall-off since widely criticised Building Control Regulations BC(A)R SI.9 have been introduced in March 2014.

It has been noted by industry commentators that BC(A)R SI.9 has pushed up the cost of a typical house by over 30%, impacting on the feasibility of many potential residential projects. The result is a lack of entry level affordable housing for families hoping to get on the ladder, and spiraling rents.

Full article here:Irish Trophy Homes Are Back With the Property Bubble a Distant Memory

Extract:

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“From the top of a hill close to the Irish Sea in Howth, developer Joe Cosgrave watches his team of construction workers racing to finish the granite-framed doorways and vast walk-in wardrobes at the country’s first luxury-home development since the bursting of a property bubble in 2008.

So far, he has sold nine of the Thormanby Hill houses, which have a price tag of about 1.5 million euros ($1.7 million)…

Cosgrave is banking on the return of wealthy buyers who can afford trophy properties in the wake of the worst real estate crash in Western Europe, with Thormanby Hill testing a market still in recovery. While foreigners and returning Irish emigrants have accounted for luxury-homes purchases since the crash, sellers now say they’re targeting locals…

The National Asset Management Agency, the state’s bad bank, in April sold “Mugnano,” a 5,000-square-foot (465-square-meter) home on the road. The buyer was Aengus “Gus” Kelly, chief executive officer of Dutch plane-leasing company AerCap Holdings NV, according to two people familiar with the matter. A spokeswoman for AerCap declined to comment.

“What’s happened on Shrewsbury Road over the last five years is that all of the new guys who’d come in, they’re all gone,” said Peter Kenny, an estate agent with Colliers International, as he walked the oak-paneled floors of a mansion on the street he’s trying to sell for 7 million euros. “There’s a new set of wealthy people who are coming in to take over.”..

Back in Howth, Cosgrave ponders how times have changed over the last six years, since the National Asset Management Agency took over the 500 million euros of debts he owed to Irish banks. The agency is now helping to finance the construction of his Howth development, where he hopes to build about 30 of the five bedroom, 3,358-square-foot homes.”

Other posts of interest:

Local Authorities take over fewer than 1,200 NAMA Housing units in four years

Dáil: Fall in Housing Construction following introduction of Building Control Regulations

Questions asked about Minister Kelly’s Social Housing Strategy | Irish Times

Regulations add up to €60k to house cost | Karl Deeter

Residential completions continue to stall | Department of the Environment

Building regulations make Dodge City look good | Irish Examiner

Kildare fire disaster shows madness of Kelly’s self-certification proposals | Green party

Building Control Inspections should be independent | RIAI

1 thought on “Housing Crisis | NAMA funds €1.5m ‘trophy homes’?

  1. Denise Germaine

    Watch out for the new Planning & Development Bill, currently before the Oireachtas, which will put an end to financial or land contributions to the LA in lieu of Social Housing in multi unit developments.

    Reply

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