It was a record year for redbricks in 2004, a year in which prices for top houses rose by up to 20 per cent. Property Editor Orna Mulcahy reports on the state of the market

Dublin's estate agents had another bumper year as house prices forged ahead in most sectors of the market, despite grim economic forecasts.

With interest rates continuing at historically low levels, and pension funds uncertain, many of those with money to spend in 2004 invested it in the property market, pushing up prices of family homes in the best locations.

A combination of strong auction results early in the year and good quality properties coming to the market made for a busy spring when most of the gains were made in house prices. Daphne Kaye tested the market early in February with one of the best houses in Foxrock, Woodbury on Brighton Road, a five-bedroom Tudor-style house that had been immaculately refurbished. The guide price was €3.75 million but it made €4.4 million under the hammer, with several parties competing, an indication that there were plenty of buyers out there for large scale walk-in homes.

In March came the biggest auction surprise of the year, the €6.3 million paid for a detached house needing refurbishment at 43 Cowper Road in Rathmines. Lisney had been guiding €2.5 million for the three-storey house which was purchased by a buyer in the property business, Pat Ridge, chairman of Sherry FitzGerald. Dublin 6 became the new Dublin 4 overnight and prices rose throughout the neighbourhood in the following months.

Shortly afterwards Sherry FitzGerald agreed a private sale of a substantial house on Temple Road in Dartry, Dublin 6 for a staggering €9 million plus - the highest price paid for a private house in Dublin. It was bought by housebuilder Michael Whelan.

Later in the year HOK Residential matched this, fetching €9.3 million for a large Gothic-style house on Pembroke Road, Dublin 4 called Halcam Court. The house is divided into apartments and while the buyer, property developer Gerry Gannon, has said he intends to refurbish it as a family home, it is more likely that it will be developed as apartments. Sherry FitzGerald also sold the second most expensive house on the table, one of the large Victorian semis on Ailesbury Road, number 83, for a figure believed to be over €8 million. Across the road, Douglas Newman Good fetched a more modest €4.15 million for a 1930s five-bedroom house needing extensive refurbishment.

Also needing some refurbishment was 81 Park Avenue in Sandymount, the home of the late senator and businessman Eoin Ryan, which fetched €7.1 million, the highest price paid for a private house at auction. The attraction here is the location on Sandymount's premier road, and the fact that the house comes with a 250 foot garden.

In Killiney, HOK Residential finally got Kenah Hill, a very large Victorian house on three acres that had been on the market since 2001, away. It sold for €7.7 million.

Elsewhere in Killiney, the same agent fetched €5.3 million for Cliff House, a romantic turreted house owned by musician Charlie Burchill of Simple Minds fame. Other notable sales include 31 Wellington Place, a detached two-storey house that changed hands quietly for a figure believed to be over €5 million. Again it was sold to a housebuilder.

Cash rich housebuilders were busy throughout the year snapping up houses with large gardens with development potential, such as Redcourt, on Seafield Road in Clontarf, a big redbrick house on 1.65 acres.

It sold for €7.8 million and a planning aplication has just been lodged to demolish the house and replace it with apartments.

After such good results in the spring, vendors came out in force in the autumn and suddenly there was talk of oversupply on the market. Auctions results in September and October were disappointing with above average withdrawal figures. Agents began advising clients to hold off until spring 2005 and it worked: the supply petered out and properties that had failed at auction began to be snapped up by private treaty.

By the end of the autumn season there were still plenty of buyers with big money to spend - and many of them spent it at Edward Square, a development of apartments and houses on the Bloomfield Hospital site in Donnybrook where 14 out of 15 large terraced houses have been sold from plans for prices between €3.75 million and €4 million. Only four units of the 56 units - houses, mewses and apartments - in the scheme remain less than a month after it was launched on the market through Felicity Fox.

So, a busy and a profitable time for agents at the top end of the market with a trickledown effect to smaller period homes in good locations, but that doesn't tell the whole story of the market in 2004. Second-hand apartment values remained static in value terms though what's surprising is that they didn't lose value, considering the softening in rents in Dublin. The Luas gave a lift to homes along its southern route, and it's likely that the benefit will be felt in Tallaght too. However, vendors seeking too large a premium for their homes will be disappointed, according to one south city agent.

It was a year of stiff competition between agents and vendors saw the benefit of this with more competitive fees being offered by those trying to gain market share. While estate agents will still quote fees of between 1.75 per cent and 2 per cent on paper, in fact vendors were able to do deals at as low as 0.75 per cent in 2004.