It was standing room only in the ballroom of the Shelbourne Hotel as hundreds of would-be buyers turned up in search of a bargain. After the success of the first auction of distressed properties, which took place last April, this week's occasion was guaranteed a good turnout.

They came from far and wide. Representatives of the cash economy, farmers, shopkeepers, vets, fast-food operators, hauliers and the like predominated.

There were also a considerable number of respectable-looking country women of a certain age, many of whom seemed to be looking for a suitable property for their children who were studying in Dublin.

While the attendance was predominantly Irish, there was also a fair sprinkling of Chinese and South Asians among the potential bidders. Clearly it isn't just the native Irish who are turned on by the prospect of picking up a cheap property.

However, the undisputed star of the show was undoubtedly Gary Murphy, the auctioneer, who presided over the proceedings. It is always a pleasure to watch a top-class professional at the top of his game in action. Murphy didn't disappoint as he expertly coaxed an extra €1,000 or €5,000 from reluctant bidders and frequently delayed bringing down his hammer for just long enough to entice a fresh bid and get the ball rolling again. I've been to a few auctions in my time and Murphy is one of the best that I have seen.

Even more remarkably, Murphy maintained this performance with barely a break for over five hours, during which time he brought down his hammer on over 80 properties. It got so exciting that once or twice I was almost tempted to bid on some of the lots myself and had to remind myself that I was attending the auction in a professional capacity!

With most Irish estate agents still in denial about the true extent of the fall in Irish property prices, the, mainly foreign-owned banks who were disposing of repossessed properties entrusted the job to UK firm Allsop, rather than to any of the Irish firms.

Realistic

With no vested interest in Irish property prices, Allsop has been able to ensure that the reserve prices, the prices below which vendors would not sell, were set at realistic levels. As a result only seven of the 87 properties on sale at this week's sale failed to reach their reserve prices.

Rightly suspicious of the reserve or guide prices being quoted by Irish estate agents, buyers have instead flocked to the Allsop auctions.

And what do the prices being fetched tell us about the true state of the Irish property market. All eyes were on the house on swanky Ailesbury Road. Allsop quoted a reserve price of €1.45m and it eventually sold for €2.325m.

While the sale price was €875,000 higher than the reserve price it was still just over a quarter of the €8.5m financier Derek Quinlan paid for a similar house on the road just four years ago.

The prices achieved at the latest Allsop auction indicate a decline in property prices of between 60pc and 75pc from their early-2007 peak.

Unfortunately sellers are only gradually adjusting to this new reality, with the stock of unsold houses remaining at close to record levels while houses remain on the market for an average of eight months in rural Leinster, nine months in Munster and for a year in Connacht. These guys still don't get it.

Dan's five best buys

61 Haddington Road, Ballsbridge (€635,000)

Within walking distance of St Stephen's Green. An absolute steal at this price.

249 Upper Kilmacud Road (€280,000)

Fine four-bedroomed family home in an established suburb for a fraction of the price you would have expected to pay a few years ago.

3 Killarney Park, Bray (€220,000)

With a chemist paying an annual rent of €22,860, more than enough to cover the interest and capital repayments on a mortgage, this was one I was tempted to bid for myself.

4 St Canice's Park, Glasnevin (€55,000)

With an annual rent of €5,400 this would be a good property for the budding investor.

Gurth na Carraige, Barley Cove, Co Cork (€100,000)

If you must have that West Cork holiday home then this is your only man.

Dan's five worst buys

35 Ailesbury Road, Dublin 4 (€2.325m)

The star turn of the auction. However, with the house requiring a full revamp and a tiny back garden, bringing No 35 up to scratch will leave the buyer little change out of €4m.

48 Iona Road, Glasnevin (€710,000)

Lovely house, lovely road but somehow I can't help feeling that, when you look at some of the other prices paid at the auction, this buyer paid over the odds.

The Mill House, Schull, Co Cork

A lovely property in a beautiful location but Schull is almost 500 kilometres and seven or eight hours from Dublin making impromptu weekend breaks impossible.

25A John Dillon Street, Dublin 7 (€71,000)

At just 290 square feet, an expensive shoe box.

470 Castleforbes Square, Upper Mayor St (€262,000)

There were half-a-dozen Castleforbes apartments for sale in this week's auction including another three-bedroom apartment that sold for just €192,000. This was one of the last lots sold. Was the buyer getting desperate?

- Dan White