THE price of second-hand homes is likely to surge by at least 12% this year ? growing far more strongly than even the most optimistic commentators had predicted at the start of the year.

Three months of exceptionally strong trading ? including auction success rates running at 80% of homes sold on the day ? have left some auctioneers almost doubling their forecasts for price increases over the year.

Last week saw a large detached redbrick in Rathmines, Dublin 6 ? No 43 Cowper Road ? sell at a Lisney auction for ?6.275m, almost twice the ?3m guide. The top end of the market accounts for a tiny percentage of homes but its performance is regarded by agents as an indicator of the general health of the property market. When owners of quality homes in Dublin 4 and 6 decide to sell, their confidence in the market is regarded as a good guage.

Paul Murgatroyd, economist and associate director with the Douglas Newman Good agency said that, barring any unforeseen economic shocks, the company would be radically revising upwards its forecast for price rises this year.

"We had forecast between 6 and 8% for this year but, on our figures, it is inevitable it will go into double digits again if the pattern of previous years is repeated."