Yacht Brokers Remain Positive Despite Economic Downturn
by Malcolm Maclean and Holly Overton
Leading superyacht brokers are experiencing a drop off in enquiries but remain optimistic despite the economic downturn caused by the global coronavirus COVID-19 pandemic.
Speaking to BOAT International, brokers attributed the reduction in activity to travel restrictions imposed around the world.
Y.CO head of sales, Will Christie, said the lull in enquiries had been "immediate". “Unfortunately, no business will be immune to the effects of this crisis and the superyacht market is included," he said.
“We have seen an immediate drop off of new enquiries, but that is to be expected as travel restrictions and self-isolation were imposed so quickly. People are understandably prioritising, looking after personal and business affairs.”
President and founder of US broker Denison Yachting, Bob Denison, agreed that prospective buyers are being more cautious.
“We’ve had a few clients pull back on making offers, instructing us to wait until the market stabilises. These decisions seem to be a lot less about fear of COVID-19, and more about taking a deep breath as clients watch macro-economic conditions," he said.
Some brokers have drawn comparisons between the current economic climate with the 2008 financial crisis. However, Christie argued the industry is now "better prepared" than it was in 2008.
"In 2008, the market grew at an incredible rate with yachts being sold at massive premiums to their build costs with readily available finance to new owners," he said. "When the bubble burst the correction was big and painful."
But despite the economic downturn, brokers remain optimistic that the market will bounce back quickly.
“Yacht owners feel that the financial downturn will be relatively short-lived”, said Cromwell Littlejohn, commercial director US at Northrop & Johnson.
Jamie Edmiston, chief executive at Edmiston & Company, said he "anticipates a number of opportunities for buyers in the coming weeks and months.”
Christie added that he remains "realistically optimistic" that the market will bounce back. "But in the short term, like all businesses, things will be a challenge."
Meanwhile many current owners are using their supeyachts as “the ultimate social distancing vehicle”, Denison said. “The last few weeks here in South Florida, the waterways have been busy with countless families enjoying their days on the water”.
Christie agreed. “We have some buyers who want to continue with the process as they have quickly realised that a yacht would actually serve as one of the safest places to self-contain and get away from all of this."
Meanwhile, Richard Lambert, head of sales at Burgess, advises those concerned to speak to their broker. “We have the expertise in house to answer all of your questions and we are monitoring the global situation continually to be able to make the right suggestions for your yachting plans moving forward in 2020.”
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