SHARES in stock market-listed home builders Cairn and Glenveagh were hit yesterday after a report showed residential prices were falling in Dublin.
A house price index from the Irish Independent and Real Estate Alliance showed that the cost of a three-bedroom semi-detached home in Dublin fell by an average of €4,500 in the past three months.
A separate report from stockbroker Davy and MyHome also showed a significant slowdown in asking price inflation outside Dublin.
Davy has now cut its full-year revenue projection for Cairn Homes by 5pc, while it predicts the home builder’s operating profit this year will be 16.5pc lower than a previous estimate of €85.8m.
Davy also expects operating profit next year to be 20.4pc lower at Cairn than the broker had previously forecast, at €102.6m.
The average price of a three-bedroom semi in the Dublin area is now €428,000 – down from €443,333 a year ago. The decline marks the third quarter for which there has been a consecutive fall in prices.
“The market is continuing to price in a material fall in house prices in Ireland in the short term, something we see as unlikely outside a ‘hard’ Brexit scenario,” noted Davy Stockbrokers yesterday.
Shares in Cairn Homes were 2.4pc lower by mid- afternoon, at €1.11. Founded by Michael Stanley and Alan McIntosh, the company floated in 2015, raising €385m from investors at €1 per share.
It holds land that could accommodate 15,000 homes.
Cairn said last month as it delivered interim results that the average selling price so far this year for its starter homes was €341,000.
Shares in Glenveagh Properties were 2.6pc lower by mid-afternoon yesterday, at just under 73 cent.
Davy has cut its forecast for 2019 operating profit at Glenveagh by 8.7pc to €27.8m.
Glenveagh emerged from development land that was acquired by US private equity giant Oaktree and the assets of Bridgedale, a building firm based in Maynooth, Co Kildare.
REF: Irish Independent