NAMA HAS SAID that the stabilisation of the housing market is the reason a scheme that encourage property purchases has been stopped by the agency.
Under the 80:20 deferred payment initiative launched in May 2012, buyers paid 80 per cent of the value of a selected NAMA properties up front. The home was then revalued and the buyers paid the balance of the new valuation, protecting them against price falls of up to 20 per cent.
But NAMA chief executive Brendan McDonagh said today that the scheme will end in May after it had ‘achieved it’s objectives’.
“Feedback from buyers suggests fears of price falls have abated considerably in recent months. Many buyers cite evidence from the CSO and the market that house prices are rising in Dublin and stabilising in other parts of the country,” he said.
NAMA say that to date 224 homes have been sold under the initiative with €44 million generated.
These 224 sales come from a total of 412 properties that were made available, a purchase rate of 54 per cent.
The protection will remain in place for buyers who sign contracts before the end of May 2014.
McDonagh also explained that one of the goals of the initiative was to encourage purchases so that there was greater price discovery in the market, this also no longer needed he said:
The initiative was only ever intended as a short-term measure to remove the fear of negative equity for buyers at a time when there were few residential property transactions in the Irish market.
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