Demand for new homes has never been stronger – Cairn Homes
Homebuilder Cairn has reported revenues of €131m for the first half of this year after it closed 403 new home sales.
In a trading update for the six months to the end of June, it said this compared to €81m from 207 closed sales the same time last year.
Cairn Homes said that 16 active developments are back to full production and three new site openings are planned for the second half of this year.
The company said it had a closed and forward sales pipeline of 1,530 new homes with a net sales value of €560m. This marked an increase of 605 new homes and €253m in the four months since the last update in March.
It noted that house price inflation was running ahead of cost increases, meaning its full year gross margin is now expected to come in at about 18.5%.
It also said it expected a cumulative operating profit of €125m across this year and 2022.
Cairn said its board intends to announce a €20m dividend of about 2.66 cent per ordinary share when it releases its 2021 interim results in September.
Looking ahead, Cairn said it now has clear visibility over the achievement of 2021 and 2022 operational and financial targets.
Michael Stanley, Cairn’s chief executive, said that over the past five years, its main focus has been providing competitively priced starter homes for first time buyers.
Mr Stanley said that as its market evolves, the company will continue to take a solutions-based approach, particularly given the significant challenge customers face accessing mortgage finance.
He noted that demand for new homes has never been stronger and the lack of supply has never been more acute.
“Based on analysis of census and other economic data, only 12% of homeowners are between the ages of 25 and 39 now in Ireland. The majority of people born between 1982 and 1996, who wish to own a home, have in effect been disenfranchised”, Mr Stanley said.
“However, this does not have to be the case ad infinitum. Government leadership’s comments on prioritisation this week point the way forward. It requires a significant increase in capacity and delivery involving both public and private sectors working in parallel,” he said.
“It is also imperative that good planning secured for thousands of new homes does not get consistently stymied by referrals to national and European courts. Now it’s about moving forward, timely execution and making things happen,” he added.