NAMA revisionism.

Once again another ‘firm commitment’ by the Government has been allowed to slide away, this time in the form of a re-statement of objectives for NAMA by its chairman.

In a speech at the end of last week he said that , instead of making a return on the taxpayers money and on pursuing the lenders for every last penny of what was owed,the

“core objective will be to recover for the taxpayers whatever it has paid for the loans in addition to whatever it has invested to enhance property assets underlying those loans. It is expected that Nama will have a lifespan of seven to ten years and when it has achieved its core objective, it will be wound up”.

Frankly, even this seems ambitious at this stage. NAMA has been allowed to pay 11% over the odds for these assets by the EU. The time scale for NAMA is now envisaged as 7 to 10 years rather than the 10 plus originally stated. The residential property market is in the doldrums and being constantly, if more slowly now, marked down. The commercial property market has imploded and is dominated by the stock taken into NAMA’s care where it will be subject to decision by committee and political manipulation. Dominating these two domestic travails are the continuing concerns about the prospects for the sovereign debt markets of the appropriately monikered ‘PIIGS’.

Where anyone can reliably forecast 11% growth in large scale commercial property prices when we have contracting demand, serious oversupply, medium term macro economic uncertainty and disruptive technological developments to cope with is beyond optimism and bordering on fantasy.

It is interesting to note that the chairman’s restatement was descriptive rather than assertive; in other words he gave no undertakings and made no promises, he just described what the job was.

We could do with a few more honest men like that.