Is New Zealand's Housing Crisis Is Driving A Surge In Business Ownership?

Business sales inquiries are up more than 20 per cent on the same time last year—as reflected by the number of signed non-disclosure agreements—and one of the reasons may be that a growing number of young New Zealanders are turning to small business ownership as an alternative to homeownership.

“Buying a business is becoming a more popular way to acquire wealth, particularly as we are witnessing with young Kiwis,” says Steven Matthews, New Zealand Development Manager for Link Brokers, the country’s largest business brokerage.

“Talking to buyers, it appears that the unaffordability of housing, redundancy pressures, and a desire for better financial security are key drivers of this trend.”

Matthews says the economic landscape has made homeownership unattainable for many younger Kiwis. Soaring house prices, stagnant wages, and the perceived insufficiency of traditional savings mechanisms like KiwiSaver (in terms of providing for retirement) are causing young people to rethink their approach to wealth-building.

“Gen Z and millennials are very aware that saving for retirement through wages alone is unlikely to be enough,” says Matthews.

In this environment, small businesses—offering equity growth and regular returns—are seen as viable and sometimes a superior alternative to homeownership because, besides being an investment, a business starts earning a return from the start.

Why young people are choosing business ownership

Mathews says one major factor is the aspirational culture fostered by social media.

“Platforms like Instagram and TikTok idealise entrepreneurship and portray it as a pathway to climbing the wealth ladder, with the bonus of freedom and personal fulfilment. It’s a cultural shift that has nudged the 30- to 40-year-old demographic, especially toward business ventures instead of traditional career paths or property investment.

“In the past, we would laude young people, especially those in their 20s, for going into business. Now, it is becoming an everyday thing,” he says.

Redundancies also play a role.

Matthews says that middle-management professionals facing job cuts often seek self-employment rather than re-entering the job market because buying a business offers the control and security that employment may no longer guarantee.

Immigration patterns are another influencing factor.

“New immigrants, particularly from China and India, may be motivated to entrepreneurship because they find it difficult to get good employment and risk getting stuck on low wages. For example, I have a buyer looking to purchase a food truck for that reason,” says Matthews.

Practical insights for aspiring business buyers

For those considering buying a business as an alternative to property, here are three practical tips:

1. Start small but think long-term 
Begin with a business you can manage effectively, such as a café, food truck, or service-based venture. Research the sector thoroughly and evaluate potential risks and returns. Even businesses priced between $300,000 and $350,000 can generate regular income while building equity over time.

2. Leverage expertise and resources 
Use the resources available through brokers, accountants, and legal advisers to ensure you understand the financial and operational aspects of the business.
“Conduct thorough due diligence to avoid costly surprises,” says Matthews.

3. Consider lifestyle and goals 
Entrepreneurship demands commitment.

“Before taking the plunge, reflect on how business ownership aligns with your personal goals and lifestyle. While it offers the potential for significant rewards, it also requires hard work, resilience, and a long-term perspective,” he says.

A changing economic fabric

“Buying a business is becoming an accessible pathway to wealth for those excluded from the property market. There aren’t too many other ways to build wealth unless you’re a savvy investor, climbing the corporate ladder or holding out for an inheritance (which is always shaky),” says Matthews.

About LINK International Group:

LINK International Group, founded more than 27 years ago, specialises in connecting business owners with buyers globally. With 23 offices across New Zealand, Australia, and the USA, its extensive network includes over 200 specialist Business Brokers. The company maintains a robust database of over 250,000 active buyers, ensuring it meets diverse client needs effectively and efficiently.

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