BWA Insolvency
Quarterly Market Report: Q3 2024
Navigating the rising tide of insolvency in New Zealand
As New Zealand navigates the challenges of the post-pandemic economy, latest insolvency data in the BWA Quarterly Market Report for Q3 2024 reveals a challenging landscape for business owners and industry stakeholders. With the recent collapse of the Du Val Group, a significant player in theproperty development sector, the country has witnessed a marked increase in the rate of business failures.
The latest quarterly report, covering July to September, highlights 827 insolvencies, marking a 17% increase since the previous quarter and a dramatic 47% rise compared to the same period last year. The rise is primarily attributed to the collapse of the Du Val Group, which alone accounts for a significant portion of insolvencies in the Property & Real Estate sector. This high-profile collapse has underscored the vital importance of thorough due diligence for investors and lenders, as well as its potential influence on buyer behaviour moving forward.
Beyond the property sector, the ripple effects are evident, with noticeable impacts on Finance & Insurance, Business Services, and Property & Real Estate industries. The interconnection between these sectors becomes increasingly apparent as businesses face linked challenges, such as slow property sales affecting liquidity and operational capacities.
Insolvency Data for Q3 2024
Despite some positive economic indicators, such as a reduction in the Official Cash Rate (OCR) and lower bank loan rates, business recovery appears to be lagging. It’s predicted that a full resurgence may only be visible by the fourth quarter of 2025. The report anticipates that, at least until mid-next year, the trend of increasing insolvencies will persist, with both receiverships and liquidations climbing steeply.
This current economic climate serves as a crucial reminder for business owners and professionals to remain vigilant and adaptable, embracing proactive strategies to navigate this complex and evolving landscape.
