Ireland does not have a “functioning homebuilding industry”.
That’s according to developers Cairn Homes in a new report released this week.
According to Cairn Homes, one of the country’s biggest builders, just 20 new residential developments will deliver more than 100 home sales each this year, and all are either in the capital, or the greater Dublin area, highlighting the chronic shortage in new housing supply around the State.
Five of the larger schemes, which will sell more than 100 homes apiece this year, are being developed by Cairn, with a further two developed by Gannon Homes. All of the 13 remaining 100+ developments are being developed by separate construction firms.
“It is very difficult for building companies to leverage scale benefits unless they are building on multiple large scale schemes,” the report said. With annual demand at 35,000 units, the output from Ireland’s top homebuilders equates to just 9.3 per cent, based on their current annual output of about 3,150.
But bringing supply to the market faster is being “constrained by the inability of Irish homebuilders to scale at pace” Cairn said.
Looking specifically at apartments, Cairn said that it expects just 3,500 apartments will be built in central Dublin by the end of 2021, a “critical undersupply” for a city that is growing as fast as Dublin is.
Commenting on affordability and possible buyers of Cairn Homes properties, using Revenue statistics on income, Cairn said they are about 483,000 couples in Ireland who can afford to buy a house priced between € 282,000 and €525,000, and 165,000 who can afford to buy a house priced between €303,000 and €486,000.
Assuming that a quarter of these already own their own home, Cairn says that its “addressable market” is some 265,000 couples, and 69,000 single people for its 7,200 starter homes, and some 98,00 couples, and 55,000 individuals for its more upmarket trader-up/down homes.