The sale of 16 newly-built houses in Carrickmines for around £1 million pounds each last April set the scene for an exceptional year in the Dublin property market. Now in its fifth consecutive year of growth, the market continues to surprise, and the overnight sale of the Carrickmines houses underlined the rapidity of change in Dublin house prices. Million-pound sales have become commonplace in the second-hand market. Two years ago, just nine houses in Dublin sold for over £1 million. This year, 56 Dublin houses made between £1 million and £2.75 million.

New millionaires in the IT and financial services sector were behind many of the biggest purchases. However, despite the high number of £1 million-plus houses changing hands, there was no spectacular sale to match the £5.9 achieved last year by Lisney for Sorrento House, on Sorrento Terrace, in Dalkey. This sale created a surge of optimism along the south Dublin coast and several large seaside properties in Dalkey and Killiney were launched on the market in its wake. Most did not find buyers and are still for sale. Cliff Castle, a large Victorian house on three quarters of an acre beside the sea at Coliemore Road, Dalkey, is quietly for sale at £3 million. Victoria House, a spectacular newly built house overlooking the sea on Victoria Road, is on the market at £2.7 million, while in Killiney, Fortlands, a large Victorian property on Killiney Hill Road, is on the market at £4 million.

Once dubbed Bel Eire because of the number of celebrities who live there, Killiney lost two of its big names this year. Jim Kerr of rock band Simple Minds sold his home, Killiney House, for £2.75 million early in the year - the highest price paid at auction this year - while motor racing driver Damon Hill is believed to have just sold his home, Fernside, on Killiney Hill Road, for an undisclosed amount. While many of the top-selling houses in recent years had seaside addresses, 1999 saw wealthy buyers move towards the city centre, in some cases to beat the worsening traffic.

Houses on the Georgian squares are increasingly sought after, while Ailesbury and Shrewsbury Roads again featured on the list of top sales (see panel). Another noticeable trend at the upper end of the market was the increasing demand for properties in good decorative order. The cost of refurbishing old houses has soared and with builders difficult to find, buyers seemed prepared to pay a heavy premium for properties in walk-in condition.

Gunne Residential achieved a particularly strong £1.4 million for a terraced four-bedroom house at Upper Leeson Street that had been totally refurbished. The owners had bought it in the early 1990s for under £200,000. Meanwhile on Wellington Road, a prime Dublin townhouse at Number 62 fetched £1.7 million - again the fact that it had been refurbished was a factor in its success.

On the same day a large period house on Fitzwilliam Place, in original condition, with its garden and mews intact, fetched £1.8 million under the hammer. It had been expected to make more but potential buyers were thought to have been put off by the amount of refurbishment work that needed to be done.

Million pound sales aside, the year saw steady house price increases throughout the Dublin area, particularly for apartments, newly built houses and refurbished period houses.

According to the Department of the Environment, second-hand house prices in Dublin rose by 15.76 per cent in the first six months of the year, the latest figures that are available. However, leading estate agents claim that prices will have risen by 20 and 25 per cent by the end of the year.

With the market driven by low interest rates, the continued strength of the economy, returning emigrants, and an increasing number of people in the workplace and at house-buying age, the scene is set for further price increases.

Wade Wise, director designate of Hamilton Osborne King's residential division, estimates that prices have gone up by around 22 per cent this year and sees further increases over the next 24 months. "We see some slowing down next year and anticipate growth of 15 to 16 per cent. But it will be a strong market, not just for next year, but for the next two years," he said.

Simon Ensor, a director of Sherry FitzGerald, sees price increases of 10 to 12 per cent next year. Frank Doonan, managing director of Gunne Residential, also anticipates further growth: "The smart money is on a very stable two to three-year run on prices. This will be buoyed by economic growth and inward migration to the greater Dublin area, with much of that migration in the house-purchasing age group." Mr Doonan sees prices increasing by 15 per cent to 20 per cent next year. However, Lisney director Tom Day takes a more conservative view of the market. "Next year, we won't see the same growth as in the last two years, but the market will continue to grow," he said.

"We're anticipating around 10 per cent growth. We had a lot of catching up to do after the static years in the early 1990s, and a fair bit of that has happened."

Paul Newman, managing director of Douglas Newman Good, said that with a huge supply of houses for sale this autumn, it was not surprising there was still a fair number on auctioneers' books. He expected mortgage rates to remain low at the start of next year and to gradually move upwards. Price increases would come in at between 12 to 15 per cent in 2000.

Looking to 2000, the most sought-after properties in the Dublin market are likely to be period houses, apartments and townhouses within striking distance of the city centre.

"These will go from strength to strength" according to Simon Ensor, particularly if they offer an easy commute.

The Stillorgan Quality Bus Corridor has had an "inhibiting effect" on house prices in areas further from the centre, including parts of Stillorgan and Loughlinstown.

"The bottom line is that people want to get away from QBCs," said Simon Ensor. However, he stresses that this could be good news for non-commuters seeking homes in these settled neighbourhoods, who could benefit from prices tailing off. Some buyers have taken themselves out of the commuting scene altogether by moving to the country and this trend will continue next year, says Simon Ensor. Country property has soared in value with period houses with some acreage close to Dublin particularly in demand.

This type of property has risen by 20 to 30 per cent over the last 12 months, according to leading country property agents.

Robert Ganly, of Ganly Walters, says that demand has seen country house prices "more than double over a three-year period." Proving his point, Mr Ganly quoted the example of the Old Rectory, Beauparc, Co Meath, which sold for £380,000 in 1997 - and was sold again in October of this year for £760,000.

The greatest demand is for genuine period houses of character on enough land to allow the owners privacy and, crucially, within a 45-mile radius of Dublin. Five years ago, country agents had plenty of such properties on their books but as demand has increased, so supply has dwindled, particularly for good Georgian houses in the counties adjoining Dublin.

First-time buyers are unlikely to be able to find a home in the Dublin suburbs for less than £130,000 to £150,000 in the year 2000 and an increasing number will be renting. However, rents are also to rise in the city, according to Gunne Residential's Frank Doonan.

"If you compare the rents here to London, we are still way behind, so there is some catching up to do. We haven't yet begun to talk about rent per week, we still talk about rent per month. The Docklands really needs to come on stream. It will be the single greatest control aspect on rental values in the city."