Is the Superyacht Market in Limbo
I believe the superyacht charter and brokerage market has settled into a perpetual state of limbo. Buyers, Sellers, and Yacht brokers alike are watching the mess which the 'credit crunch 'is causing to the Financial Markets and waiting to see what this effect has on the second hand yacht market and shipyard orders.
The Sellers that have been actively marketing their yachts over this winter with their brokers have generally found a buyer. The 50m + market has been very active and most of the brokerage stock has been sold to date. The 35 - 50m sales have been slower but when yachts have been priced to sell, generally they have found a willing buyer. The under 35m market has been slow and stock is starting to build up.
My reported general state of uncertainty aligned with the volatility of the world currency markets is causing a few nervous stirrings in the market. In the last few months, the dollar has moved to record lows against the euro, and this is definitely dissuading the dollar-based client from buying in euro land, and as I write, the same is happening to the Pound, and will certainly deter the pound-strong Brit from buying euro yachts. This, however, may just be a minor blip; currencies may realign and the good times may well roll again sooner rather than later; but as I write this article, I am left with a feeling of a cold wind just starting to blow through the business.
Enough `doom, gloom and general anxiety': The shipyards are currently full with orders, and it is very difficult to find builders with any spare slots before 2011.Full shipyards mean full employment for yacht designers, project managers, yacht managers, crew, interior specialists and all the ancillary businesses that are associated with building super yachts.2011 is a long way off and the orders will, I believe, continue to be placed by discerning buyers who know what they are looking to own.
Owning a new yacht has a caveat that will not be quashed, whatever may be happening in the financial markets. Blue Water Yachting, which specializes in Sales and luxury yacht charter, has a traditional business base in crew recruitment and yacht crew training. The demand for qualified crew from the Super Yacht charter market remains unabated from Captains and Owners alike and the lack of qualified crew is driving the salaries of the specialized crew ( i.e. engineers, chefs etc)upwards at an incredible rate. Yachts just cannot afford to lose their best people with so few qualified replacements available. The Training division of Blue Water Yachting has increased its capacity in its attempt to qualify crew at the necessary rate in order to satisfy market demand.
Finally, to return to my opening gambit regarding the` state of limbo` in the second hand sales market! I honestly believe that sellers will have to cut prices in order to sell their yachts. This will then have a stimulating effect through the sizes, with owners of smaller yachts cutting their prices with the knowledge that prices are being reduced further up the ladder. With deals in the shipyards being few and far between for bargain hunting buyers, the brokerage market will be studied for opportunities, and as these possibilities arise more doors will open for buyers and sellers alike.
My final thought concerns the `China factor'. When will the expected surge of Chinese buyers arrive in the traditional heartlands of the Super yacht Market -Monaco, Antibes, and Ft Lauderdale? Will they just buy new? Will they start small and work upwards? Will they charter before they buy? Watch this space and read Market Intelligence over the months and years to come!
Blue Water Yachting is an exclusive yacht charter company specialising in luxury yacht charter in the South of France. Whether you are interested in a Mediterranean yacht charter, Caribbean crewed yacht charter or a South of France luxury yacht charter, we always provide a first class service.
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