Boat values in current economic situation

[jbweston]

Has anyone succeeded in buying or selling a secondhand boat in the last few weeks? If so. how do you think the price compares with what it would have been say a year ago?

The way I see it, leaving aside foreign buyers and sellers and the complication of currency fluctuations, all our houses are worth 20-30 percent less, our financial investments are worth 20-30 percent less than a year ago and it's harder to borrow money. Cash therefore is comparatively more valuable and assets less valuable.

Add to that the fact that there must be fewer boat buyers in the market - because some of those who would have bought on credit can't get credit or have more sense than to increase their indebtedness at the moment, and some of those with cash in the bank are holding onto it as we are in a long run of rainy days.

So simple schoolboy economics suggest that secondhand boat values have decreased.

However we know that in times of declining asset values it may take sellers a while to realise (and face up to) what's happening. At the same time buyers may be cautious or even over-cautious.

Taken together those factors mean that we can predict:
- boat values are down
- buyers are more pessimistic about values than are sellers
- therefore there may be difficulty in the market establishing a fair price
- therefore sales negotiations may be stickier than usual.

My interest is partly academic and partly practical. I had been planning to change my boat during the winter. If I go ahead, what I'm expecting is the worst of both worlds:
- buyers who are few and far between and (rightly) demand a keen deal from me as seller
- sellers who are reluctant to accept a similar keen deal from me as buyer.

On the face of it, I would think boats must be worth 20-30 percent less than a year ago.

Any comments? Any recent experience?

Julian

 

[Seven Spades]

I doubt that they are much changed. New boat prices have risen as the currency has declined, this make second-hand boats look better value vis-à-vis new boats. Some such a very new HR342's might be worth slight more than a years ago.

 

[seamaster30]

The price only falls for those that have to sell. - So if you're after a bargain theres probably some to be had, but you will find it difficult to sell yours as well.
For those that have no need to sell, the value is irrelevant.

 

[cgull]

Glad I sold mine last December for the price I was asking!

 

[doug748]

I really have no idea and, considering how few professional economists saw this lot coming, I suspect few people have. However, in the spirit of these pages, I will not let ignorance stop me:
Stormy outlook.....Power driven boats. Sharp price falls as they are hit by a triple bind, Dodgy summers, Fuel price rises, Economic downturn.
Gales......Your average modern sloop. Significant and prolonged falls with both oversupply new, and used, as owners try to bail out.
Squalls..........Your old classic plastic. Steady decline. They have done most of their depreciating and they aint building many more.

As pointed out already market turnover is so small that fixing price shifts is tricky. In the end those holding out will end up being shaken out because this is likely to be a 5/10 year setback.

 

[rusland]

Sold mine at asking -5k to first viewer. I got the same as I paid in 2001 (except for broker's fee). Its the price I was thinking to sell for last year - so, I say no change in price for a mainline quality yacht. Suspect mobos may fare differently.

 

[David_Jersey]

Not enuf forced sellers in the market yet.

My bet is next spring will start to see people either in the poop or who can see poop coming over the hill for them personally (Blocks mental image /forums/images/graemlins/ooo.gif).......and saying either prudent to sell now (and take a knock) or having to sell NOW!

Don't bother me. Mine was bought a few years ago (and paid for same day) as are all my toys - shame I don't use her much /forums/images/graemlins/ooo.gif

 

[Sneds]

I think now the red diesel issue is, dare I say it? Sorted, mobos won't fair any worse than a sailey boat.
Hopefully in a few months time house prices, pensions, mortgages etc will be back on an even keel.
I didn't buy my house as an investment but as somewhere to live and I certainy didn't buy my boat to make money! But it is a little disconcerting to see the value of everything falling.
I am not bothered by negative equity as I've been there before, as long as my income remains the actual selling price is not a problem for me ie; as long as my job is ok I don't have to sell anything.
Good luck to all in this current climate!

 

[fishermantwo]

In Australia the yacht prices are definitely lower in the last 12 months. I have watched the prices fall 20% on the asking price and the yachts sell. What the sale price actually is I don't know. Yachts that are advertised for what is probably a reasonable price and the seller holds out are on the market for two years or so. What I find staggering is the large number of vessels that come on the market each week at unrealistically high prices on sites such as www.yachthub.com.au . These boats are probably worth the money being asked but will not get lookers. Some of them drop the prices drastically which never looks good, others just get relisted after 3 months at a lower price or the buyer decides to hold on to the boat.

This only effects the middle class owners of course. The rich are buying new boats, especially large game boats. I have heard one of the large local company has 140 million dollars worth of trade ins they can't sell. Plenty of yachts advertised as well where the owner has bought a new yacht and can't sell the old.

Its a buyers market the likes I have not seem before.

Australia is very safe financially. Probably a good time to buy a yacht in the States and sail home.

 

[Spyro]

"Financial investments down 20-30 percent"
I wish I had your investments. My company shares are down from 330p last year to 160p this week.

 

[planteater]

I wish i had invested my change in another boat rather than Bradford and Bingley shares!

 

[Koeketiene]

It's not all bad news.

If you've got an older boat it will have done most of it's depreciating already.
And, if it needs work - like mine - it would seem that boatyards are falling over themselves to be of service. Anything is possible right away at prices on average 15% less than when I first enquired last year. And I expect that figure to 'improve' as long as the credit crunch continues.

If you're not looking to sell and got cash; times are pretty good right now.
Two more years of recession and I'll have the boat up to scratch at a fraction of estimated cost.

Not owning stocks/shares/property... no worries.
They only real asset I've got sits on a mooring somewhere.

 

[retsina]

Pesronnaly, I welcome the recession, mainly because i dont have any investments apart from my house which has dropped down by £100k but so other peoples houses have dropped. We had a hell of a party for the last 10 to 15 years so now we are having the big hangover. My boat which i bought over a year ago is 38 years old and it can not loose any more money. I feel sorry for those who were ready to borrow to purchase a house or yacht etc.; it is bad time now.

This Economic correction should have happened 5 years ago; however; its never too late!! For the last two years we have been trying to do work on the house and we put it off because of the rediculous quotes for things like roofing, electrical work, paving etc; at list now i will be able to get sensible estimates.
Carry on sailing ; the wind is still cheap and VAT free; for now!!!

 

[Pete7]

I wonder if the high price of oil is also going to affect the cost of new boats made from GRP. Would fewer or more expensive new boats help to steady the market?

Pete

 

[doug748]

....A small piece of evidence in my local paper:
Westways (Google up for details) of Plymouth are holding a collective auction next week, mainly large, late AWBs and smaller/medium power boats. If you are in the market you could bag a bargain.

 

[Twister_Ken]

Westways auction page

http://www.westways.co.uk/westwaysboatauction.html

Unfortunately no heavy metal

 

[jbweston]

Thanks all for your responses so far.

The auction is interesting. It must be hard for brokers who are caught between telling owners their boats need to be priced lower to sell, and humouring unrealistic sellers to get the brokerage business.

An auction, however, takes subjective opinion out of the equation. Either a boat sells or it doesn't, and if it sells, that's the value, whether it's more, less or the same as the broker and other 'experts' thought it would be. It's a great way of aligning sellers' and buyers' expectations. Good luck to Westways and the sellers who are prepared to let the market fix the price.

I wonder if they'll publish the results, like the big property auctioneers do?

Personally, I don't want to benefit from other people's misfortune but do want to buy a boat (and sell my own) for a fair market price rather than haggling and wrangling because no-one really knows what a boat's worth at the moment.

And I quite agree with those who say they aren't going to sell, so value is irrelevant to them. Enjoy your boats and don't worry!

 

[doug748]

I hope to be there and will report back on prices.

 

[Refueler]

New builds are being offered with incredible deals by some ... buy the boat, 2 yrs later get all money back as long as you upgrade. OK Builder has had a good slice of wedge for 2 yrs to use to build / invest and when he pays you back 2 yrs later your number may be same but real value is substantially less.

Old boats only drop little in price numbers, real value though is again significant drop. So if you paid 20K 5 yrs ago and sold today at 20K, you have still lost quite a bit in real terms.

Boat mrakest have always been over-priced particularly in the near new to middle age ground. Based on what seller paid for the boat - thinking value is still there. It's also sustained by sellers seeing others trying it on at similar price.

IMHO - deals can be pushed on all boats old and new now that were never imagined short while ago. Sellers - some are needing to sell due to credit crunch, lack of moneys elswhere etc. sad but it happens. One mans gain - another mans loss.

I'm looking at the 32 - 37ft range for possible trade up - likely next year and am amazed at some examples out there .... prices substantially lower than previous, but still with odd silly ones !

 

[andymcp]

I paid what I thought was a fair price for our boat last month. Wasn't really changed by the credit markets etc, it's just what the boat was worth to me. Same as my house - the asking price determines what it will cost, and changes beyond that are academic as long as I still want to live there.

I do walk past the sales pontoon at Kip and see some massive amounts of boat for sale for similar/less money, but still don't think mine was over/under-priced. Just a reasonable deal that I was happy to complete.....

I do think that the boat price is to some extent academic. I mostly look at the cost of keeping it, upgrading bits, paying the bills every other day. I could have got a lovely 40+ footer for the same money, but would I want marina fees on that?