With 2024 well and truly underway and the end of FY24 fast approaching, business owners and prospective buyers alike are eager to gain insight into New Zealand’s current market conditions. Katherine Shepherd, Sales Manager of LINK Business Brokers Christchurch & South Island is happy to share that at present, the business climate is particularly positive, offering favourable opportunities for Kiwis to achieve a spectrum of business goals.
Katherine notes that the combination of easing interest rates, DTI ratio laws, and a change in government are responsible for this optimistic outlook. “The overall opinion is that interest rates have generally peaked and should alleviate this year, plus the new DTI ratio laws will allow prospective buyers to borrow money more easily and at a cheaper rate than before.” These factors have fostered a strong environment for buyers and sellers to move forward with their exiting and purchasing plans.
One dominating trend that continues to define the market is the baby boomer retirement wave. “Although we have seen a lot of business owners in their 60s & 70s retire & reap the rewards of their hard work, there is still an overwhelming number of baby boomers that have yet to sell,” Katherine says. As more seasoned vendors sell their businesses, more high-quality & long-established enterprises hit the market in search of fresh entrepreneurs to continue the legacies.
Encouraging business owners to take advantage of the current market’s optimal conditions, Katherine emphasises that now is the time to sell. “Lending is getting easier, borrowing is getting cheaper and there are still no taxes on business sales yet,” she says. “On the other side of the coin, buyers have a strong appetite, reflected in the growing quantity of Confidentiality Agreements that LINK is receiving across the country.”
It’s no secret that many Kiwis are struggling financially. People are realising that they will have to contribute significantly to their retirement funds without relying solely on KiwiSaver, and those stuck on wages are battling to build wealth. But Katherine states that acquiring a business can be a lifechanging solution. “Business ownership can provide an excellent avenue to secure equity for a happy retirement… it’s absolutely worth considering buying a business as a means to take control of your future in this financial climate.”
LINK’s presence continues to grow thanks to the buoyant business market. With the rest of the year looking bright, LINK looks forward to continuing to facilitate successful business transactions for clients, regardless of where they are in their business journey.
