the largest single loss of life the RUC suffered during the IRA's violent campaign.

Boom in 21st century Newry however is synonymous with phenomenal economic growth; outlandish displays of wealth by local entrepreneurs; near full employment and rising property prices.

A telling anecdote about Newry's wealth was last Christmas' sales fever. At Sainsbury's . . . the most 'southern' of the UK retail chain's stores anywhere in these islands - the management had to hire a private security firm to manage the huge queues of customers from north and south buying food and alcohol in huge volumes during the festive season.

The main drivers for Newry's exceptional recovery have been its two main retail centres . . . Buttercrane, founded back in 1988 and The Quays, established a decade later. The latter has more than 1,000 employees. Unemployment in the city is at around three per cent whereas in the late 1980s a quarter of the working population of Newry was on the dole.

Further evidence of Newry's growing attraction as a city to live in has been underlined by the latest survey from the Halifax House Price Index for the UK. It reveals that Newry, alongside Antrim town, are Britain and Northern Ireland's top property locations. Over the past year house prices shot up by about 50%.

Indeed Newry sits top of the UK league of rising property house prices with an average of £180,546, compared to £123,334 in 2005.

Conor Mallon, a director of Best Properties and one of the biggest estate agents in south Down, described the market in Newry as "red hot at the moment".

He said there was a huge interest in apartments and townhouses in the city.

Two-bed apartments are costing between £160,000 and £190,000, while the average townhouse is on the market for £200,000, he said. The average semi-detached house in Newry is on sale for £220,000, Mallon said.

"In the South Down region as a whole house prices rose from 2005 by up to 30%. The market is very buoyant due to low interest rates and growth in the local economy, " he said.

Best Properties have recently sold Moyne House on the Rostrevor Road in nearby Warrenpoint for £1.85m . . . an iconic sale that summed up the rising prosperity of the entire region.

Other towns and cities near to Newry have benefited from the ripple effect of Newry's growth.

But Newry's Chamber of Commerce has warned that the city and its environs are running out of land to cope with the demand for houses.

David Hanna, president of the chamber, said demand is outstripping supply by a ratio of three to one in the city.

"We can either rise to the challenge of being a real city or make a mockery of the term, " said Hanna. "In practical terms that means releasing more land under the Area Plan for residential property.

He added that Newry would benefit from the Republic's National Development Plan that will the population of neighbouring Co Louth grow to one million.

"Newry has to convince first time buyers in Louth that they can afford a home up here while they are only a 15-minute drive away from their job across the border in Dundalk.

That is the challenge facing this city."

Best Properties has also reported a 10% rise in house prices in Armagh city. The average house price for a semidetached property in the Cathedral city is £200,000.

Mallon said his advice to southern investors was that gains in Newry, Armagh and Dungannon are to be made via capital appreciation rather than rental incomes.

"A mortgage on a £220,000 house in, say, Armagh on a 6% rate would cost you about £750 a month. Realistically you might get around £500 in rental income meaning you have to make up the short fall of £250.

"But even on the most conservative of estimates, say of house prices rising by 10% annually, while it will cost you £3,000 a year, the value of your house will have risen by £20,000 . . . that's a clear £17,000 in capital appreciation."

Further north in Antrim town, which lies on the edge of Lough Neagh and is close to Belfast's International Airport, there is something of a miniboom going on.

At No 2 in the Halifax's latest UK property index survey, the average cost of a house in Antrim currently stands at £161,177 compared with £110,320 in September 2005.

The survey concluded that Antrim had become increasingly popular due to its close proximity to Belfast where prices are rising astronomically.

"It is located only a short drive away from the capital, and in close proximity to both the Glens and the Coast. Properties in Antrim are highly sought after, " the survey said.

Note: all prices quoted are in sterling. The exchange rate at the time of going to press was £1 = 1.47