Builder Cairn Homes warns cost inflation could rise by €10,000 per home

The developer has called on both the government and industry to 'significantly' invest in new housing as building costs continue to rise

Michael Stanley, Chief Executive Officer of Cairn Homes.

Ireland's biggest builder, Cairn Homes has said "significant" more investment and new housing must be delivered by both the government and homebuilding industry, with costs per home expected to rise by a further 4% in 2023.

Chief executive, Michael Stanley said it was "unfortunate" there has been such a significant increase in the cost of delivering new homes in Ireland, warning that additional material and labour costs show no sign of unwinding.

“Ireland’s relative economic success in challenging times must be underpinned by more significant investment and new housing delivery, from both the State and the homebuilding industry," Mr Stanley continued.

As core inflation remains sticky, the developer warned that the cost of building a home could increase by €10,000 in 2023.

Speaking ahead of the company's AGM, the developer reported net sales in excess of €685m, with the Irish-listed builder significantly growing its closed and forward sales pipeline to 1,905 new homes in the first three months of this year.

Reaffirming its full-year forecasts, Cairn Homes expects turnover of more than €650m, with continued growth in the developer's operating profit.

Housing output grew last year to 30,000 new homes and initiatives, particularly the First Home Scheme, with the developer saying that the shortage of affordable rental accommodation is now "appropriately being targeted and prioritised." 

Last year, Cairn Homes began work on eight new developments including new regional sites in Cork, Limerick and Kilkenny. So far this year, the developer has closed its first transaction with the Land Development Agency, consisting of 94 apartments and 48 duplex units at Archers Wood in Delgany, Co. Wicklow.

The group has also marked "significant progress," in its new landmark development at Seven Mills, Clonburris where it will deliver 569 new homes this year.

The group is targeting a gross margin of 21%, expecting continued growth in its progressive ordinary dividends of between 40-50% of full-year 2023 profit after tax.