The short answer is, it’s too early to tell. But, if I have to make a guess, I would probably say ’no’.
Many business buyers mortgage their largest asset (their home) to buy a business. If the banks are cautious about house values, they will be even more cautious and conservative about lending criteria. On the positive side, at least interest rates will be as low as they have ever been.
As a counter to the above, we do expect to see recently unemployed or redundant, anxious business buyers who do have equity in their homes, but can’t find another job. I believe we may also see large numbers of expat Kiwis coming home with money to invest. Over time we should also see an increase in high net-worth individuals emigrating because they recognise New Zealand as a safe haven. Will new buyers to the market outweigh any negative factors induced by lockdown? My guess is that buyers have a distinctive advantage in the short term as long as they can raise the money. Vendor finance may need to play an increasing role in business sales.
David Wells, Senior Business Broker, NAI Harcourts
M: 027 436 1465, www.northshore.naiharcourts.co.nz