Five years before normal housing ouput returns says Grafton boss
It could take as long as five years before enough homes are being built in Ireland to satisfy underlying demand, the boss of builders' supply firm Grafton Group has warned.
Chief executive Gavin Slark said that there needs to be between 25,000 and 28,000 homes built here every year. The figure last year was just 12,600.
Mr Slark, inset, said he has some sympathy for regulators trying to balance mortgage rules with home buyer demands.
"It's quite a challenge," he told the Irish Independent.
"It's great to say you need to stimulate the market, but I also think that it's important that whatever we do in Ireland that it's done sensibly, so we don't have a situation like we did before."
Mr Slark said that given the obstacles facing developers, including planning and securing working capital to construct housing projects, that it could easily be another five years before adequate housing supply is restored.
Mr Slark was speaking as Grafton Group reported first-half results.
Its revenue rose 13pc to £1.23bn (€1.45bn), while adjusted group operating profit was 18pc higher at £64.8m. The Irish company is listed on the London Stock Exchange and generates most of its revenue and profits in the UK. Shares in the company slumped almost 11pc as the market opened, however, as the results lagged expectations on the back of a tougher environment for its UK builder merchanting business.
In Ireland, the group was boosted by an improving economy. Sales at its Irish merchanting arm rose almost 20pc to £158.3m, and were up 12.6pc on a constant currency basis. Operating profit at the unit was 43.5pc higher at £10.7m. It was up 35.1pc on a constant currency basis. Its retail arm here - it owns Woodies and Atlantic Homecare - also performed strongly.