Not since the boat boom in 2007 have so many superyachts (100 feet and up) been sold in so little time. In fact, sales are up more than 60 percent since 2020 according to Steven Myers, CEO, and Founder of YATCO “In my 30-plus years in the business, I’ve never seen anything like it. There was a rush on pre-owned inventory in 2020 during the height of COVID, and sales in the new boat sector and charter business in 2021 have been on fire. Even yacht charters are up — whatever gets people offshore and out to sea.” Read on to discover what’s propelling this latest superyacht buying spree.
The perfect storm
COVID-19 and what’s being labeled the “billionaire economy” are the two factors driving the superyacht surge. Well-founded health concerns, office and school closings, and travel restrictions forced millions of people to hunker down in their homes. Meanwhile, 2020-2021’s rising stock markets and cheap money made the world’s wealthiest people $1.2 trillion richer. The dilemma: How to weather the lockdown and what to do with all that free time and extra dividends.
The solution
What better place to practice social distancing than on a luxury superyacht. Where else can you isolate with family and friends in picturesque locations — then move on whenever the mood strikes you? The flexibility of remote work and online classes suddenly made traveling and living aboard a yacht not only feasible and desirable, but safer. Hundreds of land lovers reached the same conclusion in 2020, when, for the first time in more than a decade, the number of first-time yacht buyers rose 10 percent. Then, from 2020 to 2021, yacht sales increased again — almost 200 percent.
Who’s buying?
Previously, the demographics of superyacht owners were in the 55- to 65-year-old range. Today, it’s 45- to 55-year-olds along with dozens of twenty-somethings, who made a killing selling their tech companies or investing in hedge funds and cryptocurrency. Before the pandemic, members of this emerging new market segment chartered yachts when they wanted to getaway. Already accustomed to the pleasures of being at sea and with the average price of a superyacht somewhere between $7 million and $8 million, the pandemic most likely nudged many of them into purchasing yachts of their own.
An upward trajectory
Demand is high, inventory is low and time is of the essence. (Truly a seller’s market.) Owners whose boats are off-market are suddenly considering selling, while those with boats listed a year ago are raising prices. Brokers are looking under rocks and along docks for preowned inventory. And, it’s all because clients are more interested in getting a yacht NOW than tracking down their dream boat or waiting up to 24 months for a production model — or three or four years to have one custom built. Less customization means faster production time, which is good news for semi-custom builders, many of whom are sold out for the next five years. Competition is intense, so buyers shorten their wish lists and stop shopping around. All these factors fed into the upward trajectory of superyacht sales the past two years.
The fact that 25 percent of the 523 superyachts sold in the first 10 months of 2021 were new builds has boat builders searching for ways to expand their production capabilities. This increase in new yacht sales shows up in every superyacht series from 100 feet to 262 feet.
Now, if you’re wondering which country sold the newest yachts last year, it was Italy. Of the 90 new superyachts sold, 58 came from Italian yards, which translates into 64 percent of the market share.
The future looks bright
Prior to the pandemic, yachting companies were expecting a busy year, building on the successes of 2018 and 2019, but found themselves having to switch gears as the pandemic disrupted supply chains in industries that depend on parts, materials, and skilled labor. While the yachting industry found accessing boat-building materials such as stainless steel, fiberglass, and resin a challenge, it was not as negatively affected as the auto and housing markets.
While the pandemic pushed shipyards and their workers to the limit, it also triggered a booming market no one could have predicted, and transformed hundreds of people into first-time yacht owners. Recent industry reports, based on the impressive pace of the past two years, project 2022 may be the best year yet for the global yacht market.
Article written by YATCO
