The number of auctions held in Dublin dropped by almost 50 per cent in 2001, to the lowest level since 1994.

According to figures compiled by The Irish Times, a total of 815 auctions where held in the greater Dublin area this year, down from 1,547 in 2000, and from a peak of 1,804 in 1998. Of those 815 properties, just over 25 per cent were sold under the hammer with a further 17 per cent sold in post-auction negotiations.

Traditionally, only unusual or expensive family homes were put to auction, but throughout the late 1990s the big Dublin agencies sold more and more houses under the hammer as demand rocketed. At the height of the boom, small estate houses and even apartments were being auctioned.

The dramatic fall in auction sales this year puts the auction market back where it was before the property boom. In 1994, 800 auctions were held in Dublin.

Auctions generally represent just a fraction of all sales - about five per cent nationally. However, in Dublin the percentage of auctions is higher, representing 20 to 25 per cent of overall sales.

Auctions are seen as a speedy and efficient way of selling a house. By comparison, under the private treaty system, houses can take months to shift, and sales are frequently delayed when bidders pull out at the last minute. Auctions have also become an important barometer of the strength of the economy and for house prices in general.

The main agents have used the auction process as a way of establishing their brand in the market. A successful auction on a particular road frequently leads to other sales in the same area, in the expectation that underbidders are still on the lookout for a home on the road.

Vendors often secure premium prices under the hammer, which could not have been obtained by private treaty. The bonus often results from the skilled handling of an auction, where several parties are chasing a property. An experienced auctioneer can eke out the last £1,000 from the floor.

The drop-off in auction sales is a clear indication that the Dublin property market has not only stabilised but gone into reverse.

House prices across the capital have dropped by between five and 20 per cent, according to industry sources, and a further drop is expected next year.

Auction figures are due to drop again in 2002, according to Sherry FitzGerald's director of auctions, Simon Ensor. "There was a huge fall-off in auctions in the second half of the year and we think that the first six months will be an action replay. Auction figures could drop by another 50 per cent."

"The whole criteria for putting a house for auction is that the property is going to create competitive interest. But people no longer feel that they have to compete."

"People have developed a resistance to auctions," says Marcus Magnier of Jackson-Stops. "They like the certainty of an asking price. So much time and effort and expense goes into an auction, and where agents have given guide prices that are so far removed from the reserve figure, it annoys everyone. To some extent purchasers have switched off. People are prepared to sit on their hands and say it might be cheaper in four months time."

"The reality is that you are as likely to get as good a price by private treaty as through auction," says Simon Ensor. "There are plenty of people who will go after a house by private treaty who would not go to an auction." However, private treaty sales can quickly turn into private auctions where more than one party is interested in a property.

"Private treaty doesn't mean that you find one buyer and sell to them." says Marcus Magnier. "A lot of agents will be trying to generate competition, running private auctions for private treaty properties."

Lisney, which handles a large percentage of homes at the top end of the market, maintains that the auction is still the best way to get the best price. "Where we feel a property will generate competition, and where vendors expectations are realistic, we will advise people to go to auction." says Lisney director Tom Day.

It is still the best way to get a speedy conclusion and achieve the market value for a property. "We have a number of properties already lined up for the early spring and they will be for auction."