The Pub market has changed significantly in the last 18 months with pub sales down 50 per cent in 2001 and a very different service environment facing publicans.

Some market commentators suggest that until the Government clarifies its position regarding deregulation the pub market will continue to be uncertain. However for publicans, deregulation has already effectively happened. Under the provisions of the Intoxicating Liquor Act in July 2000 pub opening times were lengthened and, crucially, the movement of licences became easier.

There are 13,000 pub licences in the country and until July 2000 moving one of them was a complicated and restricted business. Now licences can be moved anywhere and effectively the only people that can stop a pub from opening are the planning authorities.

The doomsayers predicted that the free movement of licences would prompt a rash of applications to change all sorts of buildings from church halls to sweetie shops into pubs. It hasn't happened. The price of a pub licence which at one stage peaked at £150,000 (€190,460) is now down to £55,000 (€69,835) - a price point most agents agree it will stay at for some time.

The buyers of these licences are mainly supermarkets looking to use them to establish an off trade.

There are however some high profile licence moves with at least two former landmark bank buildings in Dublin set to become pubs. Planners are now the key figures in the pub trade.

Another major change is the variation in pub opening times. In the past year publicans have been seeing how the new opening hours work for them and weighing up the potential increase in income against staff costs. So instead of all pubs keeping the same hours, owners are judging their own particular market and setting their times accordingly. Some of the larger, trendier pubs in Dublin city don't open at all during the day but open at 3 p.m. or even 5 p.m. and serve under special licence until 3 a.m. Some suburban pubs, which could serve on Saturdays until 12.30pm, have last orders half an hour earlier.

"With the benefit of hindsight I'd say that the pub market peaked in autumn 1999," says Bill Morrissey of Morrissey auctioneers. "From then on you had a build up of conditions that were rubber stamped by July 2000." From that time on escalating staff costs started to eat into profits. Longer opening hours then increased the wage bill and the price freeze meant that publicans couldn't pass overheads on in increased drink prices.

"The slowdown in 2001 had already begun in the last quarter of 2000," says Morrissey. "Between April and July nothing at all came on the market which is unusual and it continued to slow for the rest of the year." Twenty one pubs came on the market in Dublin in 2001, half the number of the previous year. According to John Ryan of Insignia Richard Ellis Gunne, the capital value of the market reduced to £49 million (€62m) while the average price paid for a pub was £2.3 million (€2.9m) the same as in 2000. Bill Morrissey puts the reluctance of potential vendors to put their pubs on the market down to several factors, not least the means by which pub values are usually calculated.

Traditionally, potential buyers assess value by doubling net turnover after vat. Buyers now look hard at that turnover in relation to staff costs and for 2000 and the early part of 2001 publicans found their profit margins progressively squeezed which affected the potential value of the pub.

"The period of sitting on the fence is coming to an end," says John Younge of John P Younge Auctioneers.

"In the past two weeks I've seen potential buyers coming forward and pubs will come on the market." He notes that the banks have become increasingly cautious in the licensed trades as well as in other areas of the property market. "Loans have been cut back from 80 per cent to 60 per cent," says Mr Younge, "that started in earnest in June this year, so before September 11th, things were slowing down."

"It's often been said that pubs are recession proof," says John Ryan, "and people are always looking for a good cash business." Acknowledging that the pub market is at its lowest level for many years he thinks that it will pick up after a slow start in 2002. "The euro changeover means that it's not going to be a normal year," he says.

"Vendors are going to have to be realistic about the changes in the market." Echoing his colleagues in residential property, he says that vendors will have to adjust their expectations.

Bill Morrissey sees conditions becoming more favourable for the pub market. "The general slowdown is easing the staff situation for publicans considerably and the lifting of the price freeze allowed publicans to pass on some overhead costs," he says. Morrissey is "quietly confident" that by the spring there will be some movement in the market.

On a 10-year average, 5.1 per cent of Dublin pubs will change hands in any one year. He estimates that it dropped to close to 4 per cent this year but could recover to 5-5.5 per cent next year.