Glenveagh Properties warns on inflation as it claims developers can meet demand with Govt help

A Glenveagh Properties site in Co Kildare. The company said cost inflation could rise by another 6% this year for building firms. But, it said industry can close the housing supply-demand gap.

Housebuilding group Glenveagh Properties has said Ireland needs around 400,000 new homes built over the next 10 years in order to narrow the gap between supply and demand and improve the country’s accommodation crisis.

However, the group has also warned that ongoing building materials cost inflation will likely push up house prices further.

Speaking on the back of a strong set of annual results, Glenveagh chief executive Stephen Garvey said supply chain constraints and rising oil prices have pushed up building and construction costs over the past 18 months with that inflation only set to continue.

Glenveagh expects cost inflation to rise by a further 6% this year, with that likely to push up house prices. Mr Garvey said construction firms are having to pass on costs to customers, but Glenveagh is trying to limit its rising costs as much as possible.

Glenveagh said it more than doubled its revenues last year to €476.8m and returned to profit. Its results show a pre-tax profit of €45.7m for 2021, a turnaround from a €15.7m loss in 2020. 

The company completed 1,150 houses last year, up from 700 in 2020, and expects to complete 1,400 units this year. That number includes new houses, apartments and commercial units.

Mr Garvey said Glenveagh remains on course to meet its medium-to-long-term target of completing 3,000 units per year. He said the industry, as a whole, needs to be building around 30,000-35,000 houses and apartments a year – or roughly around 400,000 over the next decade – to get Ireland’s accommodation crisis under control.

He said this target is realistic, even with a rapidly expanding population, and that the industry is responding, but government help is also needed.

Mr Garvey said if the industry could build 70,000-90,000 houses a year in the early part of this century it can boost its output from the current levels. However, he said this will need the right policy environment in place. He said it is up to policymakers to incentivise and help with supply.

He said the extra 400,000 units needed cover everything from first-time buyer homes to downsizer accommodation, student accommodation, social housing and affordable living.

Nearly 31,000 units were commenced last year. But, Banking and Payments Federation Ireland this week warned staff shortages could curtail the delivery of new homes.

Mr Garvey said Glenveagh has the capital, people and skills set to boost its housing output and meet its targets and has no current issues around staff shortages.