2008Review: AUCTION MARKET:Auctions have virtually collapsed in a year of dismal results - and agents don't expect a recovery any time soon, writes Orna Mulcahy, Property Editor

THE AUCTION system all but died in 2008 with auction sales just 9 per cent of what they were at the peak of the property boom in 2006.

A total of 127 auctions were held in the greater Dublin area this year, down from 421 auctions in 2007, and 1,500 auction sales in 2006.

Dismal results greeted those who did place their property on the block in 2008. Just 26 properties sold under the hammer - around 20 per cent of the total.

Most of the year's auctions were held in the first six months of the year, when there was some hope that the market would correct itself: 98 auctions took place between January and June, of which 29 sold under the hammer or in subsequent negotiations - a 30 per cent strike rate. However, by September - traditionally a busy auction month - the economy took a nosedive and property sales with it. Just 29 auctions took place in the second six months, of which only five sold either under the hammer or subsequently, a success rate of 17 per cent.

Auctioneers faced empty rooms as buyers were not prepared to bid competitively as values slipped by the month, and even by the week.

With the banks shutting down lending for property purchases across the board, would-be buyers found they could not arrange funding within the 21 days of a typical auction campaign.

In fact most banks were refusing to lend to those who had not already sold their home before contemplating a purchase.

The drop-off in auctions has starved the market of information about house prices. In the past, regular auction results provided a barometer of house values, based on prices achieved under the hammer in a public auction room. Private treaty sales are subject to the Data Protection Act, and estate agents cannot reveal prices unless they have written permission from both the buyer and the seller.

The situation came to light earlier this year when The Irish Times told auctioneers it would no longer publish private treaty results submitted to the paper, since it noted that in some cases sale prices were being exaggerated to hype the market.

While auctioneers have called on the Government to allow for the release of house prices, there has been no indication that this will happen.

Meanwhile buyers and sellers are operating in a vacuum as asking prices slide and sales prices - often arrived at after a series of price cuts - are undisclosed.

Auctioneers don't expect to see a return to the heady days of the boom when frantic bidding at auctions often pushed prices up to 50 per cent over the guide for homes in premium locations.

Auctions have traditionally been the preferred method of sale for special homes likely to attract several bidders and a premium price. This year, however, after an initial flurry of expensive homes failing to sell in the spring, vendors are looking to sell privately if they can. According to Simon Ensor of Sherry FitzGerald, the agency's top three sales of the year were all negotiated privately, at prices well above what they achieved in the auction room.

Auctions may make a comeback next year, but not for exclusive houses that have been primped and polished for viewings. Instead, it may be that distressed sellers resort to auctions to offload their properties.

Across the UK, the US and also in Europe, property auctions are busy with developers and homeowners attempting to create a sense of urgency.

In the UK auctions are seen as as speedy method of selling "problem" properties - notably bank repossessions. Such bank sales haven't been popular here, but there could be an opening in 2009 as the prices hit bottom and houses and apartments need to be sold, at any price.