The chief executive of housebuilder Cairn Homes says the State has enough construction workers to build 50,000 homes a year, appearing to contradict a report from the National Competitiveness and Productivity Council (NCPC), which pinpointed a shortage of labour as a key constraint on the industry.
“We have an abundance of labour in residential construction, despite what people say,” Michael Stanley said at the company’s annual general meeting (agm) in Dublin on Friday.
There has been a significant transition of labour from office and hotel development into residential development in the wake of the pandemic and the recent hike in borrowing costs, he said.
“To get to that 50,000-unit run rate, I don’t believe labour is a significant constraint,” Mr Stanley said. The Government is expected to upgrade its housing targets to at least 50,000 new homes annually later this year.
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Mr Stanley was speaking after a report this week by the NCPC concluded that the State would need to attract more construction workers if enhanced house building targets were to be met.
Does Dublin have a problem with vacant offices?
“Do I think that the construction labour market is healthy on a 10-year or 20-year view? No, it’s an ageing workforce,” he said.
In Dublin city over the past seven to eight years, about eight square metres of office space had been built for every one square metre of residential space, he said.
“A very large portion of that focus has moved back into residential,” he added, noting the main constraint on housing output was the lack of serviceable development land.
[ Cairn Homes gets permission for Blessington developmentOpens in new window ]
In a trading update also published on Friday, Cairn said that demand for its new homes remains “exceptionally high across all tenure types”.
While reaffirming its full-year guidance of building 2,200 housing units, up 30 per cent on last year, and generating an operating profit of about €145 million, the company said State supports to aid buyers, a more favourable mortgage market and the limited supply of competitively priced starter homes were “driving the positive momentum” in the business.
Cairn also noted it had agreed commercial terms with a leading university for the forward-funded delivery of 500 student beds in a scaled development adjacent to the campus, without disclosing which university.
Mr Stanley declined to comment on the prospect of a Sinn Féin-led government dismantling the various first-time buyer support schemes, a stated aim of the party.
“All we can comment on is, ‘Could we increase our output by 30 per cent this year without supportive Government policy?’ – and the answer is no,” he said.
[ Cairn Homes chief saw total pay packet increase €800,000 last yearOpens in new window ]
In its trading update, Cairn said it continues to grow its longer-term sales pipeline, reflecting the increase in active large apartment projects. Its current total closed and forward order book stands at more than 2,750 new homes, with a net sales value in excess of €1.05 billion.
Some 1,000 of these units will be delivered in 2025 and beyond, it said.
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