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Dan White: If McInerney Homes is in this much trouble is any firm safe now?

IN truth, the news that an interim examiner had been appointed to McInerney Homes didn't come as much of a surprise. The group's parent company, McInerney Holdings, has debts of more than €200m and has been in talks with its bankers for almost a year.

Even so, McInerney Homes -- the main operating subsidiary of McInerney Holdings -- is one of the country's best-known housebuilders.

It has been in business for almost a century and during that time has built tens of thousands of homes all over the country. Today hundreds of thousands of Irish people live in McInerney-built homes.


That such a well-known name can get into financial difficulties demonstrates that no company, not even a household (pun intended) name such as McInerney, is safe from Ireland's 21st-century great depression.

What did for McInerney Homes was the collapse in the Irish house-building sector.

With Irish house prices having collapsed by at least 50pc from their early-2007 peaks and the banks no longer prepared to lend most people the mortgages they needed to buy houses, new housing output has dropped from 93,000 in 2006 to a maximum of 15,000 and probably less this year.

This has been translated into the loss of 150,000 jobs, with the number of building workers down from more than 280,000 at the top of the market to just 130,000 today and more job losses to come.

No business, no matter how well-established, can survive that sort of an implosion in its main market. And it's not going to get better any time soon.

A particularly poisonous legacy of the house-building frenzy of the Noughties is that the country is now massively over-supplied with unoccupied new homes, with two recent studies putting the number of empty homes at somewhere between 300,000 and 340,000.

The country is now populated with hundreds of "ghost estates". This means that there is unlikely to be a recovery in either house prices or new house building for a decade or more.

So what does the future hold for McInerney? The appointment of an interim examiner to McInerney Homes, which apart from being the group's main operating subsidiary was also its main loss-maker, buys McInerney Holdings time.

With McInerney Homes now protected from its creditors for up to 100 days, the group is now in a position to seek new investment.


McInerney Holdings is already in discussion with US private equity house Oaktree Capital about a possible €40m investment.

That's the good news. The bad news is that even if the Oaktree investment materialises, it probably won't save McInerney Homes.

No-one in their right mind would want to invest in an Irish house-building firm.

Not alone has demand disappeared for the foreseeable future but the value of McInerney Homes main asset, its undeveloped sites, has evaporated with recent court cases indicating that the value of building land is now down by more than 90pc.

All that is likely to survive of McInerney Holdings is its UK and Spanish operations, as well as its commercial arm, Hillview Development. It is almost certainly these, rather than McInerney Homes, which are of interest to Oaktree Capital and other possible suitors.

This means that McInerney Homes and its advertising catch-phrase, "better built by McInerney", are likely to disappear completely, one of the many hundreds of building firms to have been consumed by the black hole that the Irish construction sector has now become.

McInerney Homes wasn't the first Irish house-building firm to buckle under the mounting financial pressure and, with demand for new homes unlikely to recover this side of 2020, it certainly won't be the last.