Nama chief says oversupply of property now less of an issue

Oversupply of residential and commercial property is becoming less of an issue in the State’s major centres of economic activity, according to the chief executive of the National Asset Management Agency.

Brendan McDonagh told a conference in Dublin organised by the Construction Industry Federation that there were more reasons to be positive than there had been for some time.

“Investors are again interested in buying Irish assets, including commercial property where yields have become very attractive relative to euro government bonds.”

He said the agency planned to make up to €2 billion in vendor finance available over the next four years to prospective customers of commercial property held by Nama’s debtors and receivers. This was in a context where investment in the commercial property market in 2011 was just €200 million.

He said Nama was working with the IDA and Dublin local authorities to identify potential sites for office development in Dublin’s central business district.

Nama will contribute at least €2 billion in loan finance to commercial and residential projects aimed at meeting medium-term supply shortages.

He said the outlook for the construction sector was aided by population trends, with increases of about 45,000 a year. But he said a dramatic recovery in property prices was unlikely in the immediate future.