The shortage of housing supply and the need to ramp up output over the coming years is well known at this stage. Less well understood is the underlying structure of the homebuilding industry, the players within it and its scale (or lack thereof).
To fill this information gap, Dermot O’Leary, Goodbody Chief Economist, and colleagues have released a report which is a deep-dive analysis (a Census, if you will) of the builders, contractors and developers who have been building homes in Ireland over the past five years. The data analysis carried out by Goodbody Analytics comprises of c.110,000 commencements and has identified 434 builders and 49 contractors over the period from 2019 to the end of 2023.
Key takeaways:
1. Cairn and Glenveagh together account for 15% of market output
2. Contractors prominent in the apartment building sector
3. Lack of scale in homebuilding remains a major issue
1. Cairn and Glenveagh together account for 15% of market output
The two PLCs – Cairn Homes and Glenveagh Properties – are identified as the number one and two builders in Ireland, respectively, over both the cumulative five-year period and in 2023. Since 2019, we estimate that Cairn commenced on 7,400 residential units, compared to Glenveagh at 6,660. In 2023, Cairn commenced on 2,190 units, representing 8.1% of the total (excluding one-off housing). Glenveagh commenced on 1,850 units in 2023, representing 6.8% of the total (excluding one-off units). This highlights the importance of access to equity in the ingredients to success in ramping up housing output over recent years in Ireland.
2. Contractors prominent in the apartment building sector
The next three biggest providers of homes in Ireland in recent years have been main contractors as opposed to homebuilders. This is particularly prevalent in the apartment building sector. Cairn was the biggest builder of apartments in 2023, with three contractors the next largest. Efficient production of apartments is particularly important over the coming years in Ireland given the imperative of compact growth amid a growing population and a fall in the average size of households.
3. Lack of scale in homebuilding remains a major issue
Our analysis highlights the distinct lack of scale of homebuilders in Ireland. The top ten builders of homes in 2023 accounted for 32% of total commencements in Ireland, relative to 42% in the UK. Noting the distinction between homebuilders/contractors, the share by the top ten homebuilders falls to just 21% in Ireland. The tenth largest homebuilder in Ireland commenced just 250 units last year. This lack of scale threatens the attainment of Ireland’s housing requirements over the coming years. The PLCs accounted for 23% of commencements in Dublin, but only 8% outside of Dublin, suggesting scope for expansion over the coming years outside of the capital.
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