The Border region appears to be reaping the "peace dividend" in the form of a building boom. The latest Central Statistics Office figures show that more planning applications were granted in the Border region in the three months to June than in any other region. The average home which received planning permission in a Border county was also larger than homes given approval in other counties.

Border auctioneers believe that peace has fuelled an optimism which is driving the property market.

"The peace has put a bit of confidence back in the market," said the north Leinster chairman of the Irish Auctioneers' and Valuers' Institute (IAVI), Mr Phillip Gunne. A total of 1,569 planning permissions were granted in the Border region during the second quarter, compared to 1,485 in Dublin city and county. The Border homes were bigger, with an average floor area of 153.9 sq m. The smallest homes had a floor area of 119.1 sq m and were in Dublin.

"The market here at the moment is unreal," said Mr Gunne, who is based in Dundalk. "Businessmen from Derry tell me that you can't buy there, while Newry will shortly be the prime retail area in Northern Ireland."

A former IAVI president, Bundoran-based Mr Cormac Meehan, said the Donegal property scene was being boosted by tax deadlines for the seaside renewal scheme, strong sterling, and changes in capital gains tax which resulted in lower tax payments on property with planning permission. People who had traditionally bought holiday homes in Connemara, west Clare, Kerry or the south-east were now beginning to realise there was good value in Border areas, Mr Meehan said.

These factors were in addition to the already buoyant economy.

Mr Gunne said that 18 months ago, the benefits of the booming property market were only beginning to reach the north-east. As well as bringing confidence to the market, peace in Northern Ireland also resulted in US and EU funding being invested in the Border region.

Overall, the CSO figures confirm the continuing building boom, with the 9,739 applications granted during the three months up 10.7 per cent on last year.

Some of the applications were for multi-home developments, with 11,059 new homes granted planning permission. The largest number of these - 1,687 - were in Dublin.