NAVIGATING THE 2020 SALES MARKET
As the first quarter of 2020 closes and the impact of the pandemic Covid-19 is felt across the world, the yachting industry is adjusting to the changing market. Three of IYC’s top brokers share their advice on how yacht owners, and potential buyers, should best navigate the situation.
The first quarter of 2020 closed with a 30% decrease in the number of yachts sold – when compared to the same period in 2019. This is primarily driven by a particularly low month of sales in March of this year. The lockdown in key yachting hubs on both sides of the Atlantic, travel restrictions and the general market sentiment have put several sales transactions on hold.
The number of price reductions recorded during the first quarter remains similar to those in previous years, with 382 yachts announcing price changes. The average price reduction across all size segments was €494,000. If owners are considering a price reduction, broker Matthew Stone believes that it is vital to fully understand the current market landscape, and adjust accordingly. “Get accurate and detailed market intelligence. While this may come as a surprise, there are very few companies and even fewer brokers capable of giving you the data needed to determine when and how much of a reduction you should do. What you shouldn’t do is small incremental price reductions, that’s a recipe for a vessel to linger on the market.” As Mark Elliott explains, “Follow the market, the competition and your broker’s advice. When the phone does not ring, your price is too high.”
Travel restrictions mean that the majority of people are unable or unwilling to travel to visit a yacht. Therefore quality photography, videography and virtual tours are critical for the marketing material and enabling potential buyers to experience a yacht. “Professional imagery, videography, and copy are vital for a compelling listing,” says Stone.
A strong digital presence – a yacht’s website, utilising Search Engine Optimization (SEO) and social media – can be key to finding a buyer in 2020. As Frank Grzeszczak Jr. explains: “Digital is everything. We have more available information on our phones than ever before. Buyers of multi-million dollar yachts are not exempt from spending hours a day on their phones. Before a consumer decides to make a purchase on any product, it is likely they have researched on the internet to the extent that is available before picking up the phone to make contact with a listing broker. We have about five seconds to make a first impression on a potential buyer of a multimillion-dollar toy- the impression needs to be nothing short of stellar.”
As a result of the increase in the number of yachts for sale, and the price reductions, the market will be more appealing for potential owners who are thinking of buying their first vessel. How should they approach the market? “Start preparing now!” advises Stone. “Develop a rapport with a broker, establish a budget, and establish how you will use the boat. There will be opportunities that present themselves if you’re adequately prepared, you can act efficiently.”
For those looking to enter into yacht ownership, education on the nuances of the market is priceless. “Any potential buyer should consult with a reliable broker early on in the process. There are many things to consider when purchasing a boat, such as how will you use it – will it be for private use, charter, or both? Where will you register and flag the vessel? As the flag state, you choose to fly will have a direct bearing on your privacy, taxes, and exposure to liability. These are just a few examples of why it is crucial to have someone representing you and looking out for your best interests,” says Stone.
Although predictions for the rest of the year are difficult to confirm, IYC’s expert team foresee an increase in the number of yachts listed for sale and more quality yachts at realistic prices. As Elliott concludes, “It will be a buyers market for a while.”
Our sales brokers choose their top yachts for sale with IYC:
M/Y Mirabilis: Simply the best yacht in its class in the world.
M/Y Ruscello: A stunning interior, in excellent condition.
M/Y Valerie: There are not very many builders in the world that have the pedigree of a Lurssen. With only a few Lurssens on the market at any given time, this is a wonderful opportunity to own one of the finest yachts ever built.
M/Y SeaLyon: Northern European build quality with an Italian flare. Winner of the World Superyacht, International Yacht, and SBID Design Awards. Extremely motivated seller!
M/Y Bliss: One of the leading yacht manufacturers out of Northern Europe, this masterfully built boat is stunning thanks to her black aluminium hull and matte grey superstructure. Capable of speeds up to 26 knots.