According to a recent RNZ article, we have hit a 35-year high in people who have an interest in buying. Unfortunately, most are sitting on the sidelines awaiting more certainty in both the political and financial sectors.
A major business broker said they had generated over 3000 confidentiality agreements in the last quarter but that had not generated to sales which were down by 8%.
Locally we are seeing something similar with a high level of enquiries from both investors and working proprietors but within the current market either the actual return is not great enough or the financial risk for the potential return is too high for the banks.
It is common for business decision-making to go into a holding pattern in the months prior to an election and we can only hope that once a result is known, confidence returns and prices have had some resilience.
As the saying goes “Good things take time”, so if you are of going down this track take the time to properly research your venture, so you have all the necessary information to make the right decision. Make sure your business plan is complete, not just the financials but showing you understand where the market is now for your venture and your strategies for future growth but also how you will handle any negative aspects that may occur.
We are always happy to have a chat about our listings, or talk to us about your venture and maybe we can help you locate that base of operation.
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Feb 16, 2024
Is 2024 Starting To Turn The Corner?
Say goodbye to 2023, which according to many commentators had the worst commercial sales in nearly 30 years. Buyers were nervous with the cost of living and rising inflation, with high interest rates and an election season which seemed to occupy nearly 6 months of the year. While inflation is slowly trending down, there is still significant uncertainty as to when the Official Cash Rate (OCR) will begin to track below 5%. Initial expectations aimed for a midyear adjustment, but it appears more likely to be in the last quarter of 2024. With a low volume of sales for the last 18 months, data on value and returns is limited and the first question on a seller’s mind is “What is my property worth”? This is reflected in many properties being offered as “By Negotiation”, as vendors were uncertain as to meeting buyers expectations and sought to find the middle ground. Already this year we can see a change happening with prices being stated or asking for offers over a value. Construction costs appear to have stabilised and with the prospect of lower interest rates coming, the new build option becomes more attractive. As with any cycle, well designed properties in good locations have been in demand. However the challenge has been readying properties for sale or lease where factors such as location, design, layout, or value present questions for the purchaser. Those in the market for a property may need to broaden their expectations to successfully navigate deals.
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Gearing Ratios
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