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The challenges of selling in a boom


With historically high yacht sales recorded in the past two years, one might surmise that this is a golden time to be a yacht broker. But there are downsides to the upswing. Brokerage yacht inventory is low, new build slots are few and far between, and some asking prices are unrealistically high – all of which is making it a challenging time for sales brokers, despite the fact that boom has slowed down from a year ago.

The record highs in yacht sales occurred in 2021 – in June of that year, for example, 91 yachts were sold. Year on year, things have ebbed, with 40 yacht sales reported for June 2022. “The boom has passed somewhat, the reason being that there was a large amount of inventory in June 2020, but there’s not a huge amount of inventory now,” says Henry Smith, partner and sales broker with Cecil-Wright. “The boom was always going to be unsustainable because [brokers] don’t have the inventory to replace it. A lot of people just want a yacht now. They don’t want to wait for a new build.”

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Despite the fact that 2022 isn’t quite as record-setting as 2021, when looking at the data historically, we are still on a high. “While sales numbers worldwide have slowed a little on the record-breaking 2021, sales continue to pace 78 per cent above the average for any year on record,” says Mark Duncan, director of Marketing & Business Development at Fraser Yachts. “That has put some pressure on pre-owned and new build inventory, and some owners are seizing the opportunity to stay firm on their asking prices, and in some cases, even raise them.”

A lack of inventory has helped to raise prices across the board. “Asking prices are higher than in previous years,” says Carmen Lau Stratton of Camper & Nicholsons. Though it’s no surprise that an asking price usually differs from the selling price, as Jan Jaap Minnema of Fraser Yachts attests. “Sometimes sellers are just testing out the market [with a high price] to start with and when offers are consistently not matching that, they will be open to lowering the price.”

The rate of client engagement is still exceptionally high, which is contributing to the sense of the boom stretching on. “There are a lot of people actively looking to buy a yacht,” says Ian Sherwood, sales broker with Burgess. “Yachts under five years old and particularly over 50 metres are in short supply – and they are popular when they become available.”

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Sherwood negates the idea that it is a “seller’s market”, instead pointing to the overall global economy and inflation making everything more expensive than it was a year or two prior.

Low supply means that some older yachts are also being priced higher than before – but the higher prices aren’t translating to a rise in actual value. “I suspect that some of the older boats that have been sold, looking at the prices they sold for, people will come to regret what they paid,” says Smith.

There is also continued demand for new construction projects, despite the ever-rising new build costs and longer delivery times, but securing these build slots presents a challenge. “Most shipyards today do not have available slots until 2025/26 – that’s some time to wait,” says Minnema. “Some buyers are prepared to wait and will charter in the meantime. Some buy a smaller yacht and wait for their new build. And some pay the premium to purchase the perfect yacht now.”

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