According to Premier Marbella news sources, property prices in Ireland rose in June for the first time in five years since the crisis erupted. Experts are already saying that the worst of the crisis (when property values depreciated by 50%) may have passed. Specifically, property prices rose 1.2% year on year, the first increase since January 2008, according to figures from the government statistics office. Continue reading
Ireland may be the mirror which Spain is set to use to evaluate the evolution of its Bad Bank. Ireland set up the National Asset Management Agency (Nama) three years before the Spanish Bad Bank (Sareb) and the two entities have been created under the supervision of the European Union (EU). Some of the major similarities and differences between Nama and Sareb are: The Irish Bad Bank began only with toxic loans, while Sareb started with loans, property, ongoing developments and plots.
In addition, the Irish bank started with a smaller number of mortgages, which implies a lower management difficulty compared to Spanish entity. The Spanish bad bank will be the largest European real estate, by far.
As for the structure of assets there are substantial differences, according to International Financial Analysts (Afi). Nama started with no foreclosed assets, only loans that financed land, property developments in progress, and property.
Specifically, the distribution of the initial portfolio of Nama in November 2009 was: 19% of loans on land, 10% in developing real estate and 71% on finished product, of which 23% was in housing, 22% in offices, 20% in retail, 15% in hotels, and the rest in other real estate assets.
Housing loans accounted for 16.3% of the total, whilst Sareb has begun its journey earlier this year with an approximate burden of 20% in foreclosed properties of which 85% is concentrated in housing. The balance being loans whose net book value exceed 250,000 € calculated at borrower level.
As for the total number of loans, in its infancy Nama had fewer mortgages than that of its Spanish equivalent Sareb. Specifically, the number of loans with Nama is 772 and although no specific data is available, (Afi) estimates that the number with Sareb could reach 150,000.
Another difference between the two banks is that Nama has a greater geographic concentration than Sareb. 54% of the total portfolio is in Ireland, 32% in England, 4%, in Northern Ireland, Scotland 1%, other 1% in Wales and the remaining 8% elsewhere. The greatest concentration of loans to build took place in the cities of Dublin and London. However, the geographic distribution of Sareb’s assets is much more diversified. With 49% of the total concentrated in the province of Madrid, Barcelona and Levante. This implies greater difficulty of managing and finding an exit for the property assets.
The bad bank, dubbed Sareb, has become a massive real estate. The entity has begun with a volume of 36,700 million euros in real estate assets from the four nationalized entities. It is expected to reach 65,000 million in 2013 when more assets from other troubled banks are transferred. This portfolio is twice that of the Irish bad bank Nama and stands as the largest European real estate, according to figures from International Financial Analysts (AFI)