A fall in boat prices on horizon?

[ashtead]

With increasing rents , interest rates and inflation will this lead to a fall in boat prices over the winter? It would seem the property market is sluggish with price reductions appearing on rightmove but maybe the used boat market is due for a measured cooling down if not a crash.

 

[ylop]

With increasing rents , interest rates and inflation will this lead to a fall in boat prices over the winter? It would seem the property market is sluggish with price reductions appearing on rightmove but maybe the used boat market is due for a measured cooling down if not a crash.

Depends who you think the average boat buyer (of the type you are interested in) is. If they need to borrow to fund the boat - quite possibly. If they have borrowings on a house - perhaps. If they are in comfortable jobs with no mortgage (or fixed for a while), or on an index linked pension I don’t think they will be suffering the same effects.

 

[Concerto]

Unlikely to see any major fall in secondhand prices. Supply and demand will adjust prices far more than interest rates. Most owners are unlikely to have a marine mortgage, possibly have a house mortgage they took out many years ago so any interest rate rises will only have minimal effect. Increased living costs including fuel will curtail many activities which might stop some owners from changing boats or doing maintenance/improvements. Some owners may move to cheaper berthing to reduce costs. However most owners will have little difference as they either have sufficient capital/savings to change their boat. The problem is post Brexit we now have a closed secondhand market as craft outside our shores will have many hurdles to get through from VAT, compliance to current rules, etc. Over the past decade there has been a reduction of new boats brought into the UK and new boats are rising in price rapidly, so for this section of the market prices may even rise. This general lack of supply and a reduced number of buyers will keep prices fairly stable or close to current prices except at the very bottom of the market when condition will be the deciding factor on what sells and more small old boats will become worthless.

 

[Moonbeam]

No man is an island.... no matter how comfy you might be, most peoples wealth is dependant on having a drink from someone else, usually further down the food chain.

Have a look at this... I've chosen the following filters, Price drop button activated...UK based, sail & power, 28ft to 50ft, min price £0 to max price £400k, sorted by 'most recently listed' (you can change/play with the filters to suit your appetite) there are some eye catching reductions if you look through.

Boats for Sale in United Kingdom - YachtWorld

Brexit is mentioned above as a cause for high prices, but that's not what drove used prices high in Europe or the USA and it only played a small part here. The real driver was post covid/lockdown buying mania and the inflation that followed. It's been a one off bubble. Brokers have been surprised at how long these prices have held up, but have always been expecting them to start to unwind at some point.

New boat prices... well manufactures looked at the nuts second hand market and thought... we'll have some of that thanks. Supply shortages have been used to justify the current crazy prices for new boats... well, that excuse is running out of steam, and greedflation now looks the more likely cause. I predict new boat prices will also start coming back down soon.

Second hand boat supply has increased markedly in the last couple of months while at the same time, demand has cooled distinctly. It's going to be an interesting Autumn.

 

[Concerto]

New boat prices... well manufactures looked at the nuts second hand market and thought... we'll have some of that thanks. Supply shortages have been used to justify the current crazy prices for new boats... well, that excuse is running out of steam, and greedflation now looks the more likely cause. I predict new boat prices will also start coming back down soon.

Second hand boat supply has increased markedly in the last couple of months while at the same time, demand has cooled distinctly. It's going to be an interesting Autumn.

Sorry but I disagree.

The main boat manufacturers are mainly producing larger and larger yachts for the charter market. This means the large charter firms forward order to ensure a continual supply of new boats. Private buyers are slotted into the production order list and this currently means delivery in a couple of years time and includes contracts with price increases already written in. To order a new boat you must have a degree of flexibility in your finances to enable you do this. Most of these yachts are being ordered by wealthy people using part of their pension pot, not by those in salaried jobs.

With so many of these yachts now ending up is warmer climates, they will never enter the UK secondhand market. Brexit rules have killed this trade. There is no restriction on buying a boat abroad and keeping it there, but this will never affect the UK secondhand market prices.

Looking at the list of price reductions on YachtWorld does make you feel this is now the norm. However this does not show how the prices were set compared to similar boats sold recently. There will always be boats that are over priced, not in top condition, in the wrong place for buyers, etc. The only real price reductions are when an owner or their relatives are forced to sell due to age, ilness or death and they want to stop the constant outgoings on keeping a boat. A decade ago I viewed a boat that was overpriced at £20,000 and had already been ashore for over 3 years. The cost to keep this in the yard was about £3000 per year. 4 years later the cockpit drains had blocked and the boat became flooded internally. It was sold for about £4,000. The owner was an idiot who over valued his boat and lost heavily. I only mention this as an example of a massive price reduction. Most owners who are selling should always follow the maxim of "Your first loss is usually your least loss". In this example I valued the boat at £12,000 and was laughed at by the agent. The owner would have been far better off accepting this offer than what eventually happened. The other observation is during this selling period the boat became more and more neglected, something that many sellers overlook if a boat remains unsold after a few months on the market.

There are still reports of the right yacht selling for the asking price within hours or days of coming to the market. This current thread is an example.
The Chicken Or The Egg

 

[Caer Urfa]

Like most surveyors we can see how the sales market is and I specialize in Colvic Watson's, I surveyed 4 in June alone as many sell privately (one sold in four hrs) and sensibly priced yachts up to 35' also sell well.

What I do see in the £18 to £40 k market people will pay that bit extra for a good yacht or motor sailor and if one comes up you fancy my advice is to move quickly BUT 'do your homework'!.

As always there are some boats lets say needing a lotta TLC but still owners ask stupid prices and wonder why theirs has not sold but boats are bit like houses for sale its mainly down to condition condition.

What I do see are most buyers in this price range are around 50/60 years old and will except some TLS is needed, where as the younger generation mainly want to step aboard and go.

Then there are yacht brokers and while yes there are some good ones there are certainly some who I often wonder do they know what they they are selling, sadly some don't care its just turnover at any price

 

[V1701]

Yachtworld gives a bit of a false picture as there are only brokers' ads on there & I think a lot of brokers' initial prices are overly optimistic...

 

[Bobc]

Inflation will drive the cost of new boats up, and secondhand values will get driven up as a consequence, but there may be some forced sellers next year and in 2025.

 

[DownWest]

Chatting with a friend who's big dutch built residential barge is up for sale, (80 x20 ft). . Agent came down from near Paris and spent 6 hrs, videos all over and close inspection on all aspects. The boat is immaculate ( I have been involved! but only on the mechs)
In conversation, he mentioned that, due to some 'sort' of EU dispute.. UK owners are off loading their boats in France, as the 90 days bit makes them a problem in the cost/enjoyment ratio.

 

[Skellum]

I’ve been following the for sale websites - yacht world / market for the past couple of years and I’ve noticed a few boats reappearing that were for sale in the not so distance past. It maybe that they didn’t sell at the original price and are coming back to market having been withdrawn, or they did and the purchaser decided it wasn’t for him.

 

[Moonbeam]

Inflation will drive the cost of new boats up, and secondhand values will get driven up as a consequence

This has already happened... it's old news. Unless of course you think it's going to continue in the future, which I agree is perfectly possible.

But far more likely that prices are now going to pause and in some cases reverse. Inflation rate in the US is now down to about 3%. Inflation rate in France now about 5%. It's stubbornly high in the UK, but it will eventually fall as well.

New Tesla cars stopped selling because the price just got too juicy, buyers revolted and as a result they have had to slash their prices, several times. Price reversal...Deflation.

Tesla slashes Model 3 prices again to £38,790.

I'll concede that the boat market is different. Unlike EV's, We don't have mass produced cheap Chinese boats to compete with the French builders who do have a bit of a strong hold on the market.

Some used boats are still selling quickly if sensibly priced and even the odd one for a strong price if in very short supply. But nothing like it was a year or two ago. I'm seeing very little evidence that second hand prices are continuing to rise and far more evidence that that are starting to fall slightly. I don't think they will go back to 2016 levels when boats seemed undervalued, but somewhere between the peak last year and the 2016 trough is a likely landing place.

Meanwhile, sales of new boats are now starting to look sluggish to me. Again, very different to a year or two ago.

 

[Seven Spades]

In the loing term boats devalue at 8% in real terms so with inflation at 10% you will see a small growth in the value of your boat. The moderating factors are the economy and the post covid rebound. The long and short of it is that boats are not going to crash in price. Even if the UK economy is in the dumps it is a global market so UK prices cannot be more than 20% below the EU or EU buyers will simply purchase here. The converse is true is supply becomes too difficult and holds up prices here people will buy and pay the VAT.

 

[Trident]

Speaking recently to a friend who is a big UK broker I was told they have sold 6 in the last month. I was not told at what price but all were advertised at crazy prices (IMHO) and they have been getting near such prices for the last year. A friend just sold his 40 year old cat (refurbished to a very high standard a few years back) for £30K more than the last one sold for a couple of years ago and it was for sale for less than 4 weeks.

Anecdotal for sure, but it seems prices and sales of second hand cats at least are holding up very well - and when you consider the big names like Outremer are taking new orders for 2028 now, with no idea what the price will be then (but £40K or so down now please to hold a slot ) its no wonder second hand are still attractive . In fact in spring I saw a 5 year old Outremer sell for £200K over the current new price because people don't want to wait 5 years.

Whether the same is true for the AWB from the main manufacturers I don't know but I would guess that for monohulls the likes of Halberg, Niad and Swan will not be seeing reductions any time soon

 

[Frogmogman]

One of the drivers of high second hand boat prices of more recent boats post covid has been a shortage in supply of new boats, (hence very long waiting lists for new boats) - due in large part to covid-related supply chain issues. These problems are now smoothing themselves out, so it is reasonable to expect a cooling on the second hand market.

 

[Bobc]

One of the drivers of high second hand boat prices of more recent boats post covid has been a shortage in supply of new boats, (hence very long waiting lists for new boats) - due in large part to covid-related supply chain issues. These problems are now smoothing themselves out, so it is reasonable to expect a cooling on the second hand market.

The secondhand market is definitely cooling from the silliness of the past 2 years (as is the housing market).

 

[Adios]

The secondhand market is definitely cooling from the silliness of the past 2 years (as is the housing market).

I wonder how many people are regretting MEWing (mortgage equity withdrawal) to feel wealthy and buy a yacht. Those mooring fees will be looking excessive combined with the rising mortgage repayments.

I don't think inflation will push up used boat prices. Its a luxury item. As the price of essentials rises the spare cash is decreased and luxury items don't get bought. Its bound to be the case that a number of yacht owners are struggling and will be thinking about selling when their mooring comes up for renewal but these things take a bit of time to play out.

I don't think even new prices will rise very much despite the rising cost of components, it always rests on affordability. If enough people can't afford to pay the higher prices due to higher costs the company goes bust. What might be the case though is that there are only few builders as many already failed over the last few decades and new ones can't pop up for a short lived phase like the covid years. So the number of builders is already lean from previous lean years. And there will always be some people with pots of cash even in a recession.

I can't see how the EU aspect is a big deal when all the marinas have waiting lists. If they were half empty then I'd believe there is a shortage of boats. Its also not that bad a deal to pay Euros for a boat and then the VAT to bring it back. Prices here can't rise that much here before buying them in the EU will be attractive enough to start seeing boats coming across.

 

[lustyd]

small growth in the value of your boat

You mean price. The value is still dropping despite the numbers getting bigger. Look at chocolate bars as a good example of this, there is less chocolate but you're paying more pounds - this is not more value!

 

[Frogmogman]

I don't think even new prices will rise very much despite the rising cost of components, it always rests on affordability. If enough people can't afford to pay the higher prices due to higher costs the company goes bust. What might be the case though is that there are only few builders as many already failed over the last few decades and new ones can't pop up for a short lived phase like the covid years. So the number of builders is already lean from previous lean years. And there will always be some people with pots of cash even in a recession.

If new prices don’t increase, it’s because they’ve already factored them in; they’ve already gone up like Krakatoa.

When I bought my SO349 at the end of 2021, the list price of a brand new one in France, excluding options, was €118000.

It’s now €149400.

Jeanneau are not alone in this.

 

[Bobc]

If new prices don’t increase, it’s because they’ve already factored them in; they’ve already gone up like Krakatoa.

When I bought my SO349 at the end of 2021, the list price of a brand new one in France, excluding options, was €118000.

It’s now €149400.

Jeanneau are not alone in this.

Indeed, and as a result, a 2 year old one has gone up from 100k to 120k, and a 5 year old one has gone up from 80k to 100k.

Inflation in new boat prices increases the prices of used boat, as I said above, as it's all about the difference in price.

 

[Adios]

Indeed, and as a result, a 2 year old one has gone up from 100k to 120k, and a 5 year old one has gone up from 80k to 100k.

Inflation in new boat prices increases the prices of used boat, as I said above, as it's all about the difference in price.

Its a big mystery where people are getting the money from since MEWing went out of fashion. If the numbers are small then I guess as I said even in a recession some people do well, maybe there are enough of them to prop this up. For now.

But this is just the top end of new and nearly new. When I said I didn't think inflation would increased used boat prices I was more thinking about the price of out of production older boats that have settled in price over the years. There's a range for what people expect to pay for a certain model of boat. I can't see why inflation, with the pressure that puts on people's spending, would increase their price. House prices are falling despite inflation of building materials and other costs and houses are an essential not a luxury, they are in short supply as well.