Boom time for yacht sales and charter. (But what next?)

26 October 2021 - By Mike Stones, Superyacht Investor

Superyacht sales and charter are showing record growth. But for how much longer? And what happens when the market cools? Those were the key questions at Superyacht Investor’s recent Town Hall online meeting dedicated to last month’s Monaco Yacht Show. Also under consideration were the role of bankers in fostering sustainability and EU VAT harmonisation on charters.

Rapidly rising yacht sales and charter demand were evident to everyone. “There’s been a huge uptick in sales,” said Henry Smith, partner and sales broker at Cecil Wright & Partners’ Monaco Office. “So far in the past 12 months, there have been 260 sales of boats over 40m. That compares with 207 the year before and 190 the year before that.” He thought the split between new buyers and established purchasers was about equal.

The perception of yachts as a haven (which can be moved depending on the weather) had prompted people who previously booked two to three weeks charter to consider buying their first yacht, said Smith. Also, the imbalance between rising demand and static or slowly increasing supply was “skewing slightly” the idea of value for some yacht owners.

“Everything is cyclical. So, when this market cools, which is inevitable, you are going to have people who paid premiums for yachts being rather disappointed when it comes to selling after hearing the value has decreased.” Recent financial modelling by Cecil Wright & Partners had revealed “pretty scary” results about which yards performed better than others when it came to retaining value. As expected, superyachts from premium northern European yards retained their value most effectively.

Nevertheless, Smith remained optimistic about the manageable impact of the downcycle. “People have short memories – but not that short. We are not going to see a similar wipe out to the one we saw in 2008/2009,” Smith told attendees. “There will be people hit hard and there will be distressed sales but that happens in every cycle.”

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