Cairn Homes, the first Irish housebuilder to float in almost 20 years, made a strong market debut today, as investors bet on the robust recovery of the Irish property market. 

Shares in the company rose 5.5% on their first day of trading on the London Stock Exchange, after it raised €400m in a sale of new shares. 

The Irish property market was among the hardest hit in the 2008-9 global financial crisis, with prices plunging by over 50%. 

The country is still dotted with ghost estates and about 300,000 of its 700,000 mortgage holders are still in negative equity. 

But property prices have started to recover. They were up 16% last year, and though they remain about 38% below their 2007 peak, there are areas of stronger growth, including in Dublin where there is an acute housing shortage.

Many older developers are focused on mending their finances and struggling to meet the demand. 

Cairn, set up last year, focuses on construction projects in Dublin, the Dublin commuter belt, and Cork and Galway. It has secured five sites with a total estimated gross development value of €366m. 

The company issued shares at €1 this morning. In early trade, the share were at €1.055 in conditional trading - dealing which allows banks and brokerages to trade shares between themselves and stabilise the price of an initial public offering before the stock is issued to the public markets. 

Unconditional trading in Cairn shares is due to begin on Monday.

Including the investment of about €29m in equity and cash by Cairn's founders, the company's market capitalisation was €429.7m before trading began. 

Net of costs, the IPO raised €384.9m, the company said in a statement. 

McInerney Holdings in 1997 was the last Irish homebuilder to float on the stock market. It delisted in 2010. 

Real estate investment trust Irish Residential Property REIT last year raised €200m on the Irish stock exchange. Green REIT and Hibernia REIT have also raised funds to invest in Irish commercial property.

lan McIntosh, co-founder and executive director of Cairn Homes said that today was an important day for the Irish homebuilding industry. 

"The successful initial public offering, raising in excess of €400m of new equity capital, is a decisive step for Cairn Homes as we take a new and sustainable approach to building high quality new houses and apartments for our customers," Mr McIntosh added.