Noonan fears further pain for taxpayers’

first_img Previous articleThreat to future of St Paul’s Nursing HomeNext articleWillie in Wonderland admin House prices could lose half their value, says Goodbody’s THE Government has forced NAMA to use out-of-date, inaccurate information to  overvalue bank loans, according to Fine Gael’s Michael Noonan. Goodbody’s prediction that house prices will end up falling by 50% before levelling  out, he said, spells yet more  trouble  for  NAMA and further pain for taxpayers,  “The  prediction that house prices will lose half their value is desperate news for struggling homeowners.  This  outcome would send thousands more tumbling into negative equity.Sign up for the weekly Limerick Post newsletter Sign Up “The  consequences for  NAMA and the taxpayer are equally worrying. NAMA’s so-called  ‘business  plan’ is based on the assumption that property prices will  rise  from  the  levels  of  last November – the reference period for determining  the  current market values of the banks’ toxic developer loans that  NAMA  is  buying.“ But  according  to  Goodbody’s,  house prices have continued to plummet since then and are set to fall by a further 16% in the immediate future”.It was bad enough, continued deputy Noonan, that the taxpayer was being forced to pay far more than current  market  values  for  toxic  developer loans in a tumbling property market on the basis of their ‘long-term economic value.“But making matters even worse is the fact that NAMA is forced by the Government legislation to estimate  this  long-term value using outdated and inaccurate information.“Only last week  the  ESRI  predicted  that  the  Irish  labour force and population would  shrink  in the coming years because of recession-related emigration. This will mean lower demand for property. But in estimating the long-term value  of the property-related assets that it is buying, NAMA is prevented from using economic and demographic projections from beyond last January.  At  that  time, the CSO was still predicting a growing population for Ireland in the coming years”.There were, he continued, certain accountancy rules which require banks to  state  their  asset  value  on the date of audit, and prevent them from predicting a declining market, but that no such constraints applied to NAMA. “The  chances  of NAMA recovering taxpayers’ money, he concluded, seemed slimmer by the day. Advertisement WhatsApp Linkedin Emailcenter_img Twitter NewsLocal NewsNoonan fears further pain for taxpayers’By admin – July 22, 2010 507 Print Facebooklast_img read more