Ireland’s housing crisis persisted in 2020 with new homes completions at less than 65% of our estimated 34,000 new homes annual demand. Fundamentally, this level of demand is set to continue as our population, the youngest in Europe, reached 5 million during 2020 and is forecast to increase to 5.6 million by 2040.

While supply remained challenged, household savings reached a record high in 2020, creating more realisable, mortgage-backed demand for new homes. Following a general election dominated by the housing crisis, the Irish Government is now focused on delivering new homes, particularly social and affordable housing, and new initiatives have been announced which will encourage supply across all housing tenures. The multifamily sector demonstrated continued strength in 2020 with the Irish market continuing to offer favourable yields, steady, stable rental streams and strong occupancy levels for institutional investors seeking long-term exposure to the Irish residential market. Against this backdrop, Cairn remains ideally positioned for significant growth over the coming years.

Ireland’s new Government is focused on addressing the housing crisis with an emphasis on new builds and to “put affordability at the heart of the housing system"

• The Government’s stated goal is to provide 50,000 additional social homes over the next 5 years;
• A target for the delivery of affordable homes will be set during 2021;
• Record €5.2bn Department of Housing budget for 2021 (+ 16%); and focus on increasing home ownership rates.

Affordable housing is not currently available to a large segment of the Irish population: there are over 575,000 people in Ireland in households with incomes between €50,000 and €80,000 who cannot access social housing. This cohort of our population has limited access to mortgages and are the ‘squeezed middle’ stuck in the rental trap.

With our exceptional landbank, scale and an operating platform which we invested heavily in during 2020, we will continue to bring competitively priced new homes to a market characterised by increased mortgage backed private demand, more encouraging Government initiatives and strong institutional investor demand.

Demand continues to be supported by strong demographics, the cost of renting remains significantly more expensive than owning and the broader industry continues to face considerable constraints.

Cairn remains uniquely positioned to deliver on our growth agenda by supplying high quality, A-rated energy efficient new homes to the market and building on our reputation for creating sustainable communities for the future.

New homes completions declined just 2% in 2020, with Q4 completions (7,400 equating to 35% of 2020 supply) up 15.9% year on year. However, commencements of multi-unit developments, which is the lead indicator for future supply, fell 18.3% (and by 25.2% in the May-December period) as the broader sector focused on completing existing developments (source all: CSO). Supply challenges are likely to continue into 2021. Cairn’s commencements grew 10% in 2020.