Online business trading site BizExchange recently published its 2009 fourth quarter findings for Australian Private Business Values.
Overall, market sentiment surged for the second quarter running – in contrast to the lows experienced nine months previously – and has reached its highest levels since the Index survey began in 2006.
However, this has not resulted in higher business values, with the past six months seeing a significant number of low-priced micro businesses entering the market, thus depreciating the overall average.
The total number of businesses listed for sale has remained stable, albeit without a remarkable presence of medium and mid market business owners.
Brokers have also claimed that tight bank lending criteria have hampered trading in some quality businesses.
Generally, the past twelve months delivered relatively stable business values, particularly when compared to publicly listed companies, although ‘actual’ market business values are likely to be less than published as a notable number of business listings (at the smaller end) are being carried on from previous quarters.
The BizExchange Index forecasts and interesting new phase for the business market considering the following contributing market factors:
- Equity markets in Australia are recovering quickly from the Global Financial Crisis but are still tentative about smaller listings.
- Australia’s immigration policy continues to encourage wealthy immigrants to buy existing Australian companies.
- High household debt levels among Gen-X and Gen-Y make them reluctant or incapable purchasers of existing businesses.
- Over 100,000 businesses owned by baby boomers are still to be placed on the market as baby boomers go into retirement.
The full report is embedded below: