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Housebuilder Glenveagh says industry facing ‘extraordinary’ period of rising costs

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Housebuilder Glenveagh says industry facing ‘extraordinary’ period of rising costs

Housebuilder Glenveagh says industry facing ‘extraordinary’ period of rising costs
January 05
10:00 2022
Glenveagh said it generated total revenue in 2021 of €476m, up from €232m in the previous year which was most heavily disrupted by building site closures due to Covid.

Housebuilder Glenveagh Properties said the Irish building industry is going through ”an extraordinary” period of rising costs, supply issues, and looming labour shortages but that most of the pressures are likely to ease in time.

In a trading update and outlook, Glenveagh said it generated total revenue in 2021 of €476m, up from €232m in the previous year which was most heavily disrupted by building site closures due to Covid.

It generated what it calls core revenue last year of €402m from 977 housing units, while the price of its suburban homes was €308,000.

Glenveagh is one of two stock market house builders building homes in Ireland in a market that is facing huge demand amid long term shortages that have been made worse by the Covid crisis.

Economists predict that the Irish housing market requires up to 35,000 new homes to be completed a year over multiple years to keep up with demand, compared with around 20,000 units that are being built.

Meanwhile, CSO data show home prices across the State climbed by 13.5% in October from a year earlier due to the shortages, and it appears that the hikes in building material costs are being passed on to house buyers.

On costs, Glenveagh said that the sharp rise in inflation will ease in time and that labour shortages will be the next challenge for the industry.

“The Irish housebuilding sector is experiencing an extraordinary point in time for cost and supply chain pressures and it is management’s expectation that the current challenging environment, including inflation, should ease over time,” the company said.

“As we look to 2022 and beyond, the next key challenge for our business and the broader industry is the impact of on-site labour shortages,” it said.

Gleveagh also highlighted the agreements it struck with Fingal County Council and Dublin City Council.

On the outlook, the company said demand remains strong.

“The market backdrop remains favourable with continued significant demand for housing, particularly starter homes, evident across the group’s selling sites,” it said.

The outlook comes ahead of it publishing a full earnings statement for 2021 on March 1.

Source: Irish Examiner

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