Nama sales of residential land failing to be reflected in housebuilding
On sufficient land for 50,000-plus new homes, only 3,670 units are being built
Barry Cowen: said a vacant site tax should be implemented as soon as possible. Photograph: Cyril Byrne
Just 7 per cent of residential land sold by the National Asset Management Agency (Nama) to private investors is currently under development, newly released figures show.
The figures suggest Nama has, since 2011, sold enough land to build more than 50,000 new houses or apartments. However, only 3,670 units are under construction or have been completed, with the rest of the land lying vacant.
Mr Cowen said the figures show the “extent of hoarding of residential land which is greatly exacerbating the housing crisis”.
Fewer than 18,000 homes will be built this year, including 4,000 apartments. It is thought at least 50,000 new builds are needed to have any effect on the housing crisis.
Mr Cowen said the Department of Finance was incentivising developers to not develop sites by allowing them an exemption from capital gains tax after seven years if their sites were bought before the end of December 2014. The earliest date these properties would qualify for the exemption is December 2018.
“Most investors who bought sites off Nama are sitting on them and waiting until they appreciate in value at the end of the seven-year period when they can claim their capital gains exemption,” Mr Cowen said.
“This is a national travesty and a result of Government housing policy and deference to international investors.”
He said the Government should reduce the holding period for these sites to four years which would give investors “the opportunity to sell these sites now rather than in 2018, 2019 and 2020”.
Nama’s chief executive, Brendan McDonagh, in July acknowledged that “land hoarding is an issue” but rejected suggestions the agency should have imposed stipulations as part of its loan sales requiring purchasers to develop sites within certain pre-determined time periods. He said this would have led to a discount on the sales price achieved and would have been difficult to enforce.
The figures provided to Mr Cowen show hoarding is particularly acute in counties such as Cork where less than 1 per cent of the sites in question are being developed for housing. In other high-demand areas, such as Waterford and Galway, there are no housing units under construction by developers who bought sites from Nama. In total, home building has commenced on former Nama land in only seven counties.
Mr Cowen said a vacant site tax should be implemented as soon as possible and that the Government’s vacant site levy, which will not take effect until January 2019, “is nowhere near strong enough to discourage land hoarding in a growing market”.