Today, at the Annual General Meeting of the Irish Auctioneers and Valuers Institute (IAVI), the Institute’s newly appointed President, Ms Aine Myler raised concerns in relation to the National Asset Management Agency and called for Government action in relation to property taxes, stamp duty and the establishment of the Property Services Regulatory Authority (PSRA).

She said that “ a healthy property market needs a healthy economy and we certainly don’t enjoy that luxury at the moment. In the recent supplementary budget, the IAVI partnered with the Construction Industry Federation on a submission to the Minister for Finance, suggesting creative and innovative ways to kick-start the market, that were aimed squarely at the first time buyer, were effectively tax neutral and had the additional benefit of significant VAT payments being released through the sale of new residential apartments and houses.

“It’s clear that the mini-budget was a missed opportunity by the Government to help the housing market and to increase its tax take through VAT receipts and underpin employment in associated areas such as estate agency, conveyancing, surveying and the finishing trades. The swap scheme is of negligible value to the industry and the only employment creation initiative relevant for our members is the graduate placement scheme and we are seeking these details from the relevant Department.

“We are preparing a detailed submission to the Commission on Taxation outlining our views on the introduction of a Property Tax. Our emphasis will be on the high levels of stamp duty payments borne over the past decade, when there archaic value levels remained unchanged despite constant pressure from the IAVI. Perhaps if the Government had listened to us, they may have recognised the unsustainable nature of a tax regime based on transactions?”

National Asset Management Agency

”The banking crisis has unfurled to reveal a deeply troubled picture and the establishment of the National Asset Management Agency (NAMA) is the Government’s attempt to move bad debt from the Bank’s balance sheet and on to that of the taxpayer.

“Recent comment indicating that no Irish estate agency firms will be engaged to advise this new agency on the valuation of the assets has yet to be attributed to an official source. In the face of this, we will ask why the Government has no problem using Irish solicitors, accountants and economists, all of whom acted for the banks and developers for whose debts this agency is being established? There is no valid argument to exclude IAVI member firms on this basis, whether or not they have previously acted on behalf of these parties.

“We will make representations to the Minister, and any other relevant body, to consider our members for the valuation of these assets. The wealth of market transactional information available from these sources is crucial to this exercise. Many of our members are engaged in international agencies and have the resources, expertise and market knowledge required to assist in this important national task.

“I am deeply concerned about the operation of this Agency, as it is patently obvious that the ability to even establish it correctly lies neither with the Government nor the civil service and yet it will be these very people who will choose the administrators of the agency. It is a frightening scenario for the future viability of the property market in Ireland that a huge portion of the market will be effectively “controlled” by the State.”

Banks

“We need a functioning banking sector for business to flourish and for the normal operation of the property market. The continuing lack of credit facilities has stifled the market so much that that when this downturn is over, we will have over-corrected at the bottom of the cycle.

“Recent surveys from mortgage brokers give credence to the anecdotal evidence that banks are merely paying lip service to being open for business. While it is true to say that a mortgage was too easy to obtain during the boom, we are now experiencing an unprecedented clampdown on the availability of mortgage finance coupled with unrealistic criteria and a new set of arbitrary rules about who can borrow and who can’t.

The IAVI will continue to lobby Government for tangible reforms of the banking sector to ensure that fairness and equity applies and we welcome the recent comments of the Regulator warning the banks not to force customers off tracker mortgages. We will lobby for change in mortgage valuation practices, which we believe represent poor value for the bank, the mortgage applicant and the valuer.”

PSRA

“It looks like another year will pass without this Government addressing the legislation already drafted for the introduction of the Property Services Regulatory Authority, and another year in which licences will issue to unqualified, inexperienced and unregulated parties. Despite continuous calls from the self-regulated IAVI, our Government can’t see its way to establishing this important body on a statutory basis. We continue to urge the Minister to introduce this legislation during the current Dail term and we intend to highlight this issue over the coming months to ensure action, including lobbying the National Consumer Agency, who should also be championing this cause for consumer protection from unqualified, unregulated agents.”

Commercial property

“Many tenants who are finding it difficult to trade through this downturn will seek to cut their costs and rent is an obvious fixed cost to try and reduce. Most professional commercial Landlords will recognise the wisdom of partnering with a viable business tenant through a tricky trading period. Equally, Landlords should investigate the Tenant’s business to ensure that other costs are not at unsustainable levels and that their rent reduction will only delay an inevitable closure.

“The IAVI National Council has drafted a framework for their members to assist clients to agree rental reduction terms, when warranted. The terms agreed over the coming years will adjust to reflect these changes, bringing us more in line with the European lease model”, she said.

Members

Commenting on the current business climate she said that “over the past year, the rate of price reduction, across all sectors has been unprecedented, but it is the alarming decline in transactional activity that is the greatest challenge to the survival of member companies.

“In recognition of these difficulties the Institute has waived subscription charges, for those who have been unable to find alternative employment within the industry, and arranged several CPD and practical training courses.

“Many firms are in survival mode, following a tough 18-24 month period of ever decreasing market activity and yet there are companies doing business, even in these difficult times. The secret to surviving a recession is recognising where opportunity lies.

“In bad times, opportunity comes by abandoning things that no longer work and finding new things that will work, based on new needs. We’ve seen fine examples of this creative thinking in the new Rent-to-Buy schemes, pioneered by many IAVI members”, she said.

She encouraged members to open themselves up to new ideas, to encourage their staff to focus on expertise in customer services, to listen to and work with client and to upskill and create new opportunities.

Ends

For more information please contact Carina O’Neill, Bracken Public Relations on 01-6773277 or 087 222 812