High interest in business buying but sales dip due to upcoming election

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ABC Business Sales managing director Chris Small said would-be buyers were in a holding pattern until they had a clearer idea of what to expect from the next government.
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Interest in buying a small business has hit a 35-year high, but potential buyers are sitting on the sidelines until there is more certainty about who will form the next government.

New data from the business brokerage ABC Business Sales showed more than 3000 confidentiality agreements had been generated in the past quarter, a record for the firm, but that had not generated to sales, which were down 8 percent in the last quarter.

Managing director Chris Small said would-be buyers were in a holding pattern until they had a clearer steer of what to expect from the next government.

“Essentially the data is telling us there’s a very active purchaser market with lots of people looking for businesses, but when it comes to actually writing the cheque there is still a fair bit of caution in the market, hence an 8 percent dip in sales.

“It’s a natural tension that’s not uncommon in a market like ours less than three months out from a big election.”

Small said it was common for sales to stall during an election period and could explain the recent softening in the average business sales price.

“The 4 percent dip in the national average sale price for small businesses over the last six months represents a continued normalising from the very high prices achieved in 2021 and 2022,” he said.

“However the average price of $835,457 still remains 5 percent higher than this time last year.”

Small said this showed business sales remained resilient, compared to the 40 percent drops in valuations and sales volumes seen in the commercial and residential property markets.

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