Cairn Homes chief executive Michael Stanley has become the latest industry figure to cast doubt on the recent surge in housing commencements, suggesting a significant amount would not lead to actual home completions.
Commencements surged to over 60,000 last year, a level not seen since the Celtic Tiger era, as developers and builders rushed to avail of development levy waivers offered by the Government.
In its latest set of results for 2024, Cairn reported 4,100 new home commencements – up from 2,162 the previous year – including ten new large-scale developments.
“What I can absolutely guarantee everybody in this room, those commencements are real projects that are being built,” he said. “Sadly that’s not probably true of the broader industry,” Mr Stanley said.
“The Government has tried to boost commencements, not all of them will lead to delivery.”
His comments echo those made by construction consultant Paul Mitchell who recently claimed that while the waivers may have unlocked some apartment schemes which were previously unviable, “a misleading narrative was generated around the 60,000-commencement figure”.
Many developers were said to have put in commencement notices for more units than they intended to start to avail of the waiver.
Mr Stanley was speaking after the publication of his company’s latest full-year results, which showed revenue jumped by 29 per cent to €860 million last year on the back of 2,241 home sales.
The results come in the wake of new home completion figures from the Central Statistics Office, showing the number of new homes built last year fell back to just over 30,000 despite Government pledges it would be close to 40,000.
Mr Stanley, however, dismissed suggestions that housing supply had stagnated, insisting it would accelerate again and that the industry had the capacity to build 60,000 units a year if conditions, including planning and funding, were right.
He noted that only one in three apartment schemes passed through the planning process and that this high rate of rejection was entirely out of kilter with other European countries.
Mr Stanley said Ireland was crying out for more one and two-bed apartments, noting demand was strong despite the narrative that Irish people preferred houses. Mr Stanley noted that over 60 per cent of Cairn output last year were apartments.
The company’s latest results showed the average selling price of a Cairn home was €383,000, down slightly from €389,000 in the previous year while gross profit was €187 million, up from €147.6 million.
Basic earnings per share rose by 41 per cent to 17.9 cent while net debt was €154.4 million.
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“We took a material step, right across our business, in operational performance and volume delivery in 2024. We also made significant progress in our financial performance based on a foundation of continuous and substantial investment in the delivery of new homes for private buyers and for the State,” said Mr Stanley.
“We will continue to be relentless in driving efficiencies through scale, innovation, digital and sustainable construction to deliver new homes at pace, scale and value for money. We look forward to another strong year of growth in housing output.”
The construction company returned €115.3 million to shareholders through share buyback programmes and dividend policy during the year, with dividend-per-share rising by 30 per cent to 8.2 cent, including a proposed final dividend of 4.4 cent subject to shareholder approval at its May agm.
“The newly elected Government has put new home delivery front and centre in its programme for Government. While policymakers give due consideration to the strategic challenges surrounding housing delivery in the medium term, there are numerous quick wins that can deliver substantially more homes in the short term,” said Mr Stanley.
“This is the time for the Government to be brave and I have confidence that we and the broader industry will respond in kind.”
