Losses in the commercial property sector have badly affected Irish banks The Irish government’s so-called bad bank has warned NI landowners that what was once viewed as hugely valuable land is now almost worthless.
Peter Stewart, from the National Asset Agency (NAMA) said the ending of a false property boom was going to cause “financial pain”.
Nama was set up by the Irish government in response to the property and banking crisis.
It is set to take over loans relating to hundreds of acres of land here.
Mr Stewart, the head of Nama’s advisory committee on Northern Ireland, said on Wednesday it was likely some of it would be sold back as farm land.
He said Northern Ireland had experienced a property bubble in undeveloped land and investment properties like office blocks.
Mr Stewart said estimates suggest that the normal market for land sales in NI was about £100m in the years 2000 to 2005. But that spiked to £750m in the years 2006 and 2007.
Mr Stewart said that while Nama did not have to sell “today, this month or this year”, it did have to operate to a ten-year time scale.
“Even over such a period of time it is likely that we will see what was previously viewed as potential development land being sold to go back to farmland,” he said.
“For those builders, developers and also land traders and speculators who got caught up in the frenzy, unfortunately there is going to be financial pain.”
In May, it was revealed that up to 150 developers and investors from Northern Ireland were likely to find their loans transferred into Nama.
The National Asset Management Agency was set up to buy and manage mainly bad property loans held by Dublin-based financial institutions.
Its aim is to remove bad or impaired assets from the banks’ balance sheets, allowing them to rebuild their financial strength.
Ultimately that will allow them to start lending again and get credit flowing to businesses and home buyers.
It is also hoped that it will protect or enhance the Irish Republic’s international credit rating.
There had originally been fears that Nama could hold a “fire sale” of Northern Ireland assets but the Irish Republic’s finance minister has assured that will not happen.
This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.