CHANGING MARKETS

It is interesting to watch the markets react to change. The heat has come off the real estate market in New South Wales. As those prices of real estate have slowed the availability of good quality businesses has tightened.

Everybody accepts that the trends in the sale of small businesses and the sale of real estate are geometrically opposed to one another. Traditionally, as real estate buyers source the availability of quality real estate investments and real estate stocks becomes scarce the number of small businesses for sale increases as small business owners sell their businesses and park their money in property and benefit from a booming bull market.

However, for the past twelve months or so the property market has slowed and it is very noticeable that fewer good businesses are coming on the market for sale.

The recent abolition of vendor duty tax may have a surprising adverse effect on the property market. Instead of investors being attracted back into the New South Wales property market it may be that even more property comes on the market for sale as vendors who previously refused to sell property because of the burden of vendor’s duty now put their real estate on the market for sale. If that does happen there will be an increased number of properties for sale and it follows that in a slowing real estate market the availability of good quality businesses for sale will tighten as property owners sell and come back into the small business market. Demand for small businesses will increase and the number of businesses being offered for sale will reduce.

At Wilsons Business Brokers we have far more purchasers wanting to buy businesses than we have vendors wanting to sell. From this point it will be interesting to watch the market as the baby boomers of the 1940’s to the 1950’s now face retirement. Many pundits believe that as all the baby boomers face retirement more and more businesses will come on the market for sale.
 

Business of the Moment

Business of the Moment

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