Homebuilder Cairn Homes said the demand for energy efficient, quality built new houses and apartments in established residential locations remains "exceptionally strong" as it reaffirmed its full year guidance.
In a trading update ahead of its AGM today, Cairn said its turnover for the year will be more than €650m from 1,750-1,800 closed new home sales.
Cairn said it has made "significant" progress in its new landmark development at Seven Mills, Clonburris and it aims to deliver homes from the first phase of 569 new homes in this calendar year.
It also closed its first transaction with the Land Development Agency, consisting of 94 apartments and 48 duplex units at Archers Wood, Delgany, in Co Wicklow.
The country's housing output grew last year to about 30,000 new homes. Cairn said that initiatives, particularly the First Home Scheme, has resulted in more of its customers being able to get access to their first family home.
It added that the shortage of affordable rental accommodation is now appropriately being targeted and prioritised.
The company noted that it is still experiencing build cost inflation - including infrastructure, materials and labour - and said it expects total build cost inflation of about €10,000 per unit for 2023.
Cairn Homes said it is committed to distributing surplus cash flow and capital to shareholders.
It has repurchased 11.2 million shares at an average price of €1.03 a share through the €40m share buyback announced in March, as part of its ongoing shareholder returns programme.
Michael Stanley, Cairn's CEO, said that 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.
"It is very unfortunate that there has been such a significant increase in the cost of delivering new homes in Ireland and there is no sign these additional material and labour costs are unwinding," he stated.
But he added that "thankfully" many of its younger customers are still able to buy a new home with the necessary support of shared equity and Help to Buy.
"This is evidenced by our current closed and forward sales pipeline of over 1,900 new homes," he added.
Speaking to the media after the AGM, Mr Stanley said the company is not seeing any significant further increases in costs, but the pressures of the last two years remain "quite sticky".
"So we're not seeing much of an unwind which we had hoped," he said.
He said cost inflation is now back to around 4% on an annual basis from double digits.
Nevertheless, the chief executive said the company's average price for new starter homes has remained reasonably consistent, despite the challenges, driven by scaling of operations and innovation through areas like more off-site manufacturing and product replacement.
He added that over the last six or seven years, the average cost of starter home has risen by around €100,000, which is pretty substantial.
He said some of the recent initiatives announced by the Government, like the reduction in development levies and water connection fees, are likely to reduce the cost of Cairn’s homes.
Regarding the new planning legislation, Mr Stanley said the implementation of it would be key and there needs to be a period where the Government and policymakers think through that.
In relation to targets for housing output, Mr Stanley said it might be the case that there will need to be a rebalancing of the assessment of the number needed when the full CSO census data is published.
Shares in the company were higher in Dublin trade today.
