Lack of scale in homebuilding sector threatens future supply, report warns

Report by stockbroker Goodbody says industry is made up of a large number of smaller builders with limited capacity

The State’s homebuilding sector suffers from a “distinct lack of scale” as it is made up of a large number of smaller builders with limited capacity, a new report has indicated.

“This lack of scale threatens the attainment of Ireland’s housing requirements,” it warns. The report, carried out by Goodbody’s chief economist, Dermot O’Leary, and based on 110,000 commencements between 2019 and 2023, identified 434 builders and 49 contractors currently at work in the sector.

It found the top-10 builders of homes in 2023, a list that comprises traditional homebuilders and more specialist contractors, accounted for 32 per cent of total commencements compared to 42 per cent in the UK.

This suggested the other 473 builders/contractors “in our sample commenced on an average of 34 units (non-one-offs) last year,” the report said.


“There has been very little change in this situation over the past five years, with only five companies commencing on more than 500 units in 2023, relative to four companies in 2019,” it said.

Cairn Homes and Glenveagh Properties, the two publicly listed companies (PLCs), were identified as the two largest homebuilders jointly accounting for 12 per cent of the “market output” of non-one-off homes.

Since 2019, Cairn has commenced on 7,400 residential units, compared to Glenveagh at 6,660. In 2023, Cairn commenced on 2,190 units, representing 8.1 per cent of the total while Glenveagh commenced on 1,850 units, representing 6.8 per cent.

“This highlights the importance of access to equity in the ingredients to success in ramping up housing output over recent years in Ireland,” the report said.

After the two PLCs, the next three biggest providers of homes in Ireland were contractors as opposed to homebuilders.

This reflects the increase in apartment building in recent years, which requires more specialist skills.

“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,” the report said.

It also noted that the Greater Dublin Area, comprising Dublin and its surrounding counties, accounted for 59 per cent of commencements in 2023, and for 66 per cent of commencements when one-off units are excluded.

The PLCs accounted for 23 per cent of commencements in Dublin but only 8 per cent outside of the capital.

“While we expect new housing supply to continue to grow over the coming years, the analysis suggests that there is also an opportunity for the PLCs to grow their footprint outside of Dublin, including in the commuting counties to the capital and beyond,” it said.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times