Cairn Homes: 30,000 new homes a year 'very achievable'
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The chief executive of the country’s largest housebuilder has said meeting the perceived minimum necessary supply target of 30,000 new houses a year is “very achievable” by the industry in the short-term.
Cairn Homes boss Michael Stanley said he wouldn’t be surprised if about 20,000 houses are completed across the industry next year and the 30,000 mark could be reached in under four years.
A level of 30,000 annual completions is viewed as being the minimum target to even begin to narrow the gap between housing demand and supply in Ireland. Some theories suggest closer to 47,000 new homes a year are needed.
The Government’s new Housing for All plan targets 300,000 new houses by the end of 2030, at a cost of €4bn per year.
State building and Land Development Agency involvement are seen as key ingredients to ramping up house supply, with Mr Stanley saying part of Ireland’s housing problem has been a low level of scaleable private housebuilding companies.
Speaking on the back of a strong set of half-year results for Cairn, Mr Stanley welcomed the Government’s Housing for All plan, but suggested a tweak to Central Bank mortgage rules was needed to give it a chance of working.
“In order for the Government’s plan to have the best chance of success, it is essential that it is complemented by Central Bank rules on mortgage lending which are more appropriate to today’s critical needs,” he said.
“A framework that remains prudent but gives thousands of prospective customers earning good salaries a greater opportunity to qualify for a mortgage is urgently needed for the tens of thousands of first-time buyers who remain trapped in the affordability gap,” according to Mr Stanley.
He said a significant supply up-tick was needed to respond to huge housing demand levels, but noted encouraging signs on the supply front.
Mr Stanley was speaking after Cairn reported a 61% year-on-year increase in first-half revenue to €130.6m and a more than doubling in operating profit to €11.7m. The company has developments in Dublin, Cork, Galway and Kilkenny.
It also said it was recommencing shareholder dividends on the back of its strong first-half showing.
Cairn now expects operating profit for this year, as a whole, to be in the region of €52m, increasing to about €85m in 2022. Its cumulative operating profit guidance for the two-year period to 2022 has increased by €17m to about €137m since March of this year, it said.
In terms of a dividend return, Cairn’s board has declared an interim dividend of 2.66c per share.
Cairn is back active on 17 development sites since fully reopening in April and has three new site commencements planned before the end of the year.
The company has grown its order book from €214m in January to a high of €655m. It said it would deliver 2,550 houses this year and next.
“Cairn has never been better positioned to play a leading role in the recovery of the housing market in Ireland," Mr Stanley said.
Cairn Homes’ share price edged up by about 1.2% after the results announcement.