August 2011 Market Report

August 2011 in numbers

Yacht sales

While slipping from 30 sales in July to 12 in August may seem a dramatic drop, it follows a pattern – a spring spike and a late-summer slump – that has held for the past three years. Because this year’s peak was higher than it has been for some time (37 in May, 35 in June), the fall to August’s figure may seem more dire than it really is. While we could have hoped for continued buoyancy, 12 is still three more than were achieved in August last year. Click here for full details of the superyachts sold in August 2011

Lady Anne PB was the largest August sale

The spike also provided a welcome boost, and 2011’s overall tally is respectable: 198 yachts have been sold so far this year, for a total asking price of €1.97BN, compared with 134 at €1.55BN at the same point last year.

Toby Maclaurin, commercial manager of brokerage house Ocean Independence, believes his experience at the Cannes boat show in September is a useful example with which to understand the current market – and how things are not always as they seem.

‘There were so few people walking along the dock, it did not feel like a boat show,’ he says. ‘Previously yacht shows were visited by three different kinds of people really. Those who genuinely wanted to buy a yacht, those who might want to do so at some point in the future, and those people who just wanted a nice day out. Certainly over at the Port Canto side of the show, we were only getting the first category.’

‘In a way that accurately describes the market at the moment – there are simply just not the volumes of inquiries compared to what we used to get, but that does not mean to say that there are not buyers. They’re much easier to identify now, because they’re virtually the only people that we’re talking to,’ says Maclaurin.

Click here for more analysis of superyacht sales in 2011

New on the market and price reductions

Another 43 yachts were reported as new to the market in August – a sharp increase since July, when there were 31 – and exactly equal to the highest point this year, in March. The gap between the number of yachts on the market and the number of sales, which appeared to be closing in recent months, has been prized open again by August’s poor sales. Maclaurin believes this is one of the most important indicators of the state of the market.

‘Everybody looks at the number of yachts being sold, but you need to take in more information before you say, “isn’t this fantastic”,’ he says.

‘It’s price reduction after price reduction. With a few notable exceptions, the market is still trying to find its price level.’

Indeed 58 price reductions were reported in August – compared with 55 in July – the highest figure since March, when 60 were reported. There were 33 price reductions in August last year. Sellers may be more aware of the growing competition – but where is it coming from?

One source may be the charter market, as Maclaurin explains: ‘Prior to the market crash and the financial difficulties, there were people who didn’t need to, or didn’t want to charter their yachts,’ he says.

‘Now some people are thinking they’d better put their yacht to work because it makes them feel better, or because it has to pay its way and we’re seeing more yachts on the charter market than ever before. In particular some of the older yachts, which are always displaced by the newer products, have had a very tough time and I think there’ll be lot of people looking quite hard at their charter boat.’

New orders

Five new orders were reported in August, compared with three in July – and an analysis of the rest of 2011 is equally uneventful. To put this in context, 105 orders were made altogether last year compared with 48 so far this year. But according to Claudia Rossi, sales Manager of Italian yard Rossinavi, those who are buying are not scrimping.

‘We have lots of requests for specifications and proportions for yachts for 60m or 70m. Probably people who in this moment are able to spend a lot of money are the very, very rich people, the middle ones are in difficulties,’ she says.

Just as 777 Yacht Group founder Sonay Gunay suggested last month, Rossi believes that clients are now after something special for their money.

‘I have noticed that owners want ever more customised yachts, they want to have a unique product,’ says Rossi.

‘It is related to the wish to spend money on something that only the owner has. They don’t want to spend so much in a difficult period for something that a lot of people already have. I think that’s the reason why in this difficult moment Rossinavi are working, because customisation is a point of strength for us.’

Maclaurin agrees: ‘There is a strong element of people out there who are absolutely prepared to spend to get exactly what they want.’

But Rossi believes even the most extravagant buyers are beginning to take an interest in the investment potential of their yacht – if only as a long-term consideration.

‘We have a couple of clients who use their yachts only for private use, but they are always concerned about buying something that they can re-sell easily in the future,’ she says.

Launches and deliveries

There were 13 launches in August, including the 54.9m motor yacht Harbour Island, built in the US by Newcastle Shipyards. 19 were launched the previous month and seven were launched in August 2010.

Hemisphere, at 44.2m the largest catamaran in the world, was among the month’s 16 deliveries, although there were 25 deliveries in July – the most reported this year by some distance. 14 were delivered in August 2010.

The month-on-month drop in both launches and deliveries is probably at least partly connected to the natural seasonal slump. But Monaco is likely to give every part of the market a lift.

‘We will come away with at best two offers, at worst a handful of very strong leads – that really is as much as you ever get from a show,’ says Maclaurin, whose company will have seven yachts in the port. ‘But we won’t know whether Monaco was a fantastic success for a couple of months.’