New Zealand’s small and medium-sized business sales market has reached a new high, with completed transactions rising sharply even as the number of businesses coming up for sale continues to fall.
ABC Business Sales’ Quarterly Market Intelligence Report for December 2025 shows 507 completed business sales over the past 12 months, up 28% from 395 the year before. At the same time, new listings fell 4%, reinforcing a market where demand is outstripping supply.
Record sales point to a market under pressure
The 507 completed sales recorded in the year to December 2025 represent the highest annual total in the history of ABC’s reporting series, which began in September 2020. According to the report, that rise reflects stronger buyer demand now flowing through into completed transactions.
Demand has remained elevated across the market. Signed confidentiality agreements, used by ABC as a measure of buyer activity, rose 17% over the year to 27,804. That is the second-highest annual level on record and signals that purchaser interest remains intense despite a subdued wider economy.
Buyers are chasing fewer businesses
The market imbalance is becoming more pronounced. ABC recorded 717 new business listings over the year to December 2025, down from 749 a year earlier, while Trade Me business listings were down 7% over the same period. Compared with December 2023, average listings on Trade Me have dropped 20%, falling from 4,278 to 3,421.
That tightening in supply is giving vendors more leverage. The report says the purchaser-to-seller ratio has climbed to 39, up from 32 a year earlier, placing the market firmly in sellers’ territory. ABC defines a seller’s market as any ratio above 30.
Median days to sell also fell to 139 days, down from 146 a year earlier and well below the 188-day peak seen during the Covid period. That trend points to faster dealmaking and stronger competition for quality businesses.
Who is driving demand?
ABC identifies three main groups behind the surge in buyer demand: existing business owners looking to acquire near the bottom of the cycle, new migrants entering the market, and employees who have been made redundant and are seeking to buy themselves a job.
The report also links rising demand to lower interest rates and stronger investor confidence. It notes that high migrant arrivals and elevated unemployment have both added to the pool of potential purchasers over the past year.
Prices are rising, but only modestly
Despite strong competition, price growth has remained relatively contained. For general businesses excluding hospitality, the average sale price rose 3% over the year to $802,315. Over the shorter three-month rolling measure, prices were up 5%, suggesting some strengthening late in the year.
But the more important valuation measure, the earnings multiple, was largely unchanged. The median multiple for managed EBITDA sat at 3.62 times in December 2025, compared with 3.64 times a year earlier. That suggests values are holding at the upper end of recent levels rather than jumping materially higher.
Hospitality remains the budget end of the market
Hospitality continues to sit at the lower-priced end of the market. The average hospitality business sale price fell 8% over the year to $201,977, while the median sector multiple edged up 1% to 2.04 times.
ABC says hospitality prices have remained in a relatively narrow band over recent years, with a high proportion of transactions occurring below $300,000. The report says recent migrants are currently the most common buyers in that segment.
Education, services and wholesale lead the market
By value, education and health were the most heavily invested sectors, accounting for 38% of total dollars invested in SME business sales. Services followed at 13%, meaning the two sectors together represented 51% of all dollars invested.
By average sale price, Wholesale and Distribution was the most expensive sector at $1.563 million, followed by Accommodation and Tourism at $1.327 million. Hospitality was the cheapest sector to buy into, with an average price just above $201,000.
South Island’s growth outpaces the rest of the country
Regional results were mixed, but the strongest growth came from the South Island, where completed sales rose 70% over the year from 75 to 128. Auckland and Northland recorded 20% growth, while Waikato and Bay of Plenty were up 25%.
The Lower North Island moved in the opposite direction, with sales down 9%. ABC attributes that decline to weaker local economic conditions and softer sentiment in government-linked and professional sectors, particularly around Wellington.
Business ownership still outperforms other asset classes
ABC argues that strong returns are continuing to attract investors to private business ownership. Based on the report’s figures, the average pre-tax yield on a privately owned business is 28%, compared with 4% for residential investment property, 3.5% for a term deposit, and 4.5% for the New Zealand share market.
The report says that while private business ownership carries more risk, the return premium remains significant enough to support further investor interest and continued upward pressure on values.
Outlook points to more competition in 2026
Looking ahead, ABC expects listings to remain weak in the first half of 2026 before lifting later in the year, leaving total supply broadly flat overall. Demand is forecast to continue rising, but at a slower pace of 5 to 10% rather than the 25 to 30% growth seen in the past two years.
The company is forecasting a 5% rise in average prices for general businesses over the next 12 months, along with a modest 2 to 3% lift in business multiples.
For now, the market remains tilted toward sellers. With more buyers competing for fewer listings, the balance of power in New Zealand’s SME business sector appears unlikely to shift anytime soon.