Cairn Homes CEO says no need for a VAT cut to build affordable housing
The CEO of Cairn Homes, Michael Stanley, has said his company can deliver affordable homes to the market without any need for the Government to reduce the rate of VAT applied to housing in the upcoming Budget.
Speaking to the Sunday Independent following the publication last week of Cairn's half-yearly results in which it recorded a €16m increase in revenues, Stanley said the €600m raised from the international investment community last year conferred it with an advantage over private development companies.
He said: "[A VAT reduction] may be needed by the broader industry because things are more challenging for private companies with the cost of capital, but from my standpoint, in some ways there's a lot of negativity, [saying] this market is dysfunctional. It's not. We've already proved that with our sales."
He added: "More broadly, the Government has to look at ways to stimulate the system. But for Cairn, we can and will do business today. If other measures are brought in to support our model, that will be welcomed, but the message from us is we're just getting on with it."
Apart from the financial strength Cairn Homes enjoys by virtue of its listing on the London Stock Exchange, the firm bought land at bargain prices. Cairn acquired its sites as part of its €378m purchase of Ulster Bank's €1.75bn par value Project Clear portfolio. In the case of its west Dublin portfolio, it managed to secure 6,126 sites with planning for an average of just €19,000 a site - a fraction of the €100,000 that equivalent sites are currently commanding, according to construction industry sources.
Sunday Indo Business