House prices in the capital rose by a phenomenal 11% in the first quarter of the year.

The surge in prices in Dublin means that they have risen by 30% year on year to March 2006. This compares to a total growth rate of 23.3% during 2005, an extraordinary figure in itself.

Prices across the country rose by a more moderate 7.6% in the first quarter.

Last week's Dublin auction results show just how much people are now prepared to pay for homes in central residential areas They also highlight how poor a reflection of the eventual price the new Advised Minimum Value system is . . . with buyers now totally confused about auction guides.

Lisney sold a six-bed in Donnybrook, Dublin 4 . . . No 182 Stillorgan Road . . . for 4.9m when its AMV was 3.5m. Colliers Jackson Stops sold nearby No 34 Leeson Street Upper in Dublin 4 for 4.4 even though its AMV was 3.5m. A fivebed period house Dunlewey, No 31 Terenure Road East, Rathgar, sold for 4.6m. Sherry FitzGerald had quoted an AMV of 3.75m. On the northside, Douglas Newman Good sold No 30 Baymount Park, Clontarf, for 1.45m with an AMV of 1.1m.

Marian Finnegan in Sherry FitzGerald says that the breakdown of buyers is a reflection of the strength of demand. First-time buyers underpin the market and make up 36% of all buyers, while "trader uppers", or people selling up to buy a larger home, account for 22% of buyers.

"This is a very healthy indicator of the robustness of the market, " says Finnegan.

"Anecdotal evidence suggests that there is a shortage of larger family homes on the market during the opening months of 2006, a factor which given the strength of demand for such properties, also fuelled price growth."

Investors account for 20% of buyers in the second-hand market.

Finnegan says that the spike in Dublin house price inflation reflects the relatively poor supply of new homes in the capital.

Though fewer than one third of the population lives outside Dublin, only 22% of total completions and 14% of house completions are being provided to the Dublin market.

"As a result we anticipate that house price inflation in Dublin will continue to exceed the national average in the medium term, " says Finnegan.