Housing is a significant cost and rents and purchase prices affect the wage demands in the economy which affects in turn national competitiveness. That is why the policy on NAMA to expect at least a 10% rise in prices over 10 years sends out the wrong policy message. Fianna Fail again fails to understand the basis of national competitiveness or else choses to ignore it. €81.73 billion of mortgages is spread across about 40% of homeowners in Ireland. 40% of properties have no mortgage. If 10% of all loans to owner occupiers were written down by the lenders then that would cost €8 billion, about the amount of overpayment by government for NAMA loans at the moment.


Bill Tormey suggests that the banks be forced to write off 15% of mortgages to first time owner occupier buyers who bought in the last 5 years as an effective step to reduce costs in the economy in the face of the tax and income squeeze. I am told by Richard Bruton that this would cost about €7 billion. Fine Gael suggests that the state take part equity in a property if needed and realise its interest when the property is sold. This will have the effect of inhibiting trading-up as negative equity will still remain the big problem.