Neil Chapman, founding broker at Boatshed, highlights some current market trends and practise in the used boat sector that are likely to be of interest to both sellers and buyers.
Overall, the key market points of the last six months are as follows:
- Although the market remains smaller than it was, there are a growing number of buyers looking for decent, good value boats and in some areas there is a chronic undersupply of boats for sale.
- We are seeing a trend for medium sized sailboat ownership.
- Incorrectly pricing a boat for sale is the biggest obstacle to selling it.
Used boat market
The overall market for used boats has contracted with less boats being available for sale than before the 2008 global recession. Generally, owners are holding onto boats for longer than they used to.
Many owners are currently staying away from the used boat market, often because they have an impression that it will be hard to achieve a decent sale price for their boat or it will take an age to find a buyer.
However, in fact the contraction in the supply of decent used boats for sale and because in certain locations it is proving easy to find buyers for decent boats, means that, perhaps counter intuitively, now is a very good time for many owners to sell.
Generally buyers today are focused, informed and discriminating; in other words, serious buyers who know what they are looking for.
In the UK, Europe and USA we are seeing an increase in the popularity of 35 – 45ft sailboats. Demand is shifting as, to an extent, people are noticeably moving away from power to sailboats.
There are a number of reasons for this. Fuel costs for powerboats is more of a topic of discussion and contention amongst owners than it used to be. In my experience the overall cost of power and sailboat ownership is pretty similar, but if you regularly use a powerboat and take it longer distances, it is hard to ignore the cost of fuel and fuel consumption.
Incorrectly pricing a used boat for sale remains the single biggest obstacle to selling it quickly.
Whenever an owner insists that his or her boat is marketed at a price considerably in excess of that recommended by the local broker interest in the boat stalls, the marketing process becomes drawn out, eventually resulting in price reductions, until the particular boat is priced in line with its competition and a buyer is finally found.
Linked to correctly pricing a boat for sale is the thorny matter of depreciation. Inescapably, a new boat is a depreciating luxury asset. Whilst this fact is readily acknowledged in the car market, it is less so for boats.
The price value of new luxury cars depreciates rapidly in the first years of ownership, so that, typically, after three years most expensive cars have depreciated in value to around 50 – 60 per cent of their initial purchase price (regardless how well they might have been cared for by their owners).
The depreciation curve on most boats is similar (with a few exceptions amongst top end, sought-after bluewater sailboats). Expensive powerboats suffer the worst from steep depreciation curves, but all new boats are notably affected.
- Although there are less boats for sale worldwide than there used to be, there are plenty of keen buyers searching for used boats to buy – Boatshed’s own stats clearly demonstrate that. I expect that situation to continue.
- Technology and the online environment will continue to influence how boats are marketed for sale and replace traditional brokerage methods.
- Correctly pricing a boat for sale will continue to be centrally important to achieving a timely sale.