Are we heading into a recession in Australia? To be honest, some think Australia is already in recession, but the stats will not come out to confirm this either way for a little while. So, what does this mean for the value of your clinic if it is on the market or if you are thinking of selling soon? To be honest, I am not 100 sure! I guess that is not the answer you wanted to hear.

The impact of a recession (that is if we do go into a recession) on the value of healthcare clinics will depend upon how long the lockdown conditions continue, how deep and how long the recession would be (if we have one), how high unemployment levels reach, how low consumer confidence falls and how effective government stimulus packages are.

The IMF forecasts predict that global GDP growth will fall by three percent in 2020, compared with just 0.1 percent during the global financial crisis. The IMF also expects Australia’s economy will contract by 6.7 percent in 2020 and then rebound by 6.1 percent in 2021 if measures to contain the virus are successful. The IMF’s economic forecasts are based on expectations that the coronavirus will be contained in the second half of 2020 and that there will be no second wave of infection, but they have warned of the potential for a second wave of the coronavirus if a vaccine is not developed.

However, economists seem to agree that the domestic economy is likely to experience a V-shaped recovery when it eventually comes.

What I can say is this. At Healthcare Practice Sales we certainly noticed a drop & a lack of confidence in our clinic buyers from late March to mid-April. However, from mid-April our buyer inquiry rate & confidence shown by our buyers have jumped up dramatically. In early May we have negotiated & accepted offers on multiple clinics that we have on the market. If this increased buyer activity is a sign of things to come, then clinic values will have only dropped a very small amount & only for a short time. If the economists are right & we see a V-shaped recovery I expect clinic values to return to normal levels & then possibly rise above pre-COVID-19 levels.

If you are looking to sell your Physiotherapy, Chiropractic, Podiatry, GP, Psychology, Speech Pathology, Occupational Therapy, Multidisciplinary or other types of healthcare practice & you are concerned about a possible recession & what effect it may have on the sale of your clinic please feel free to call us on 1300 652 361. We will be happy to discuss your current situation & advise appropriately. Alternatively, if you are looking to buy a clinic please also give us a call so we can steer you in the right direction to match what you would like to buy with what current clinics we have on the market.