Yacht Sales Market Index: Global Outlook Q1 2011

Combined yacht brokerage sales in Europe and the United States in the First Quarter of 2011 were 7,469 yachts sold at a total value of $1.14 billion, roughly on par with yacht sales in Q1 2010 of 7,497 boats and $1.10 billion.

The market was stronger in Europe than in the U.S. for the period, with boat values rising sharply, mainly on the strength of sales of yachts over 55′.

According to reports of boats sold by YachtWorld member yacht brokerages, the number of boats sold in Europe rose 5% while the total value of boats sold rose at a dramatically higher rate.

Across the Atlantic, by contrast, total valuation fell in the 1st quarter while unit sales were relatively unchanged from 2010.

There were already clear signs of improvement in the European yacht brokerage market in Q4 2010. Although unit sales had slipped by 10% compared to 2010, total value of yachts sold was up 20%. This moved the total value for 2010 to $2.23 billion, a 10% increase over 2009.

Powerboats led this surge in sale prices. Although unit sales among all powerboats were down 4% for the quarter and 2% for the year, valuation was up 28% for the quarter and 15% for the year.

Among all boats over 55′, values increased by $178 million in the 4th Quarter, although the number of yachts sold of that size only increased by 5, to 161. For the year, unit sales were down 2% for the largest size boats, but total value increased from $1.13 to $1.37 billion, a 22% gain.

In other respects, 2010 was by no means a strong year for the yacht brokerage market in Europe. Total value of boats sold was down among all sizes of boats under 55′, and unit sales were down for all size ranges. In addition, the number of days required to sell a boat increased, on average, by a week, to 299 days.

While sales among powerboats were down just 2% to 3,797 boats sold, the number of sailboats sold fell by 17% from 4,056 in 2009 to 3,350 in 2010. However, the total value of sailboats sold declined only 1% to $606 million. Since most sailboats are smaller than 55′, this statistic ran counter to the larger market trend and the average price of sailboats sold actually increased.

First Quarter sales in Europe are typically the lightest volume in a given year, but a total valuation of sales at $523 million in 2011 was a 43% increase from Q1 2010, and very close to a quarter of sales valuation for 2010. Unit sales were up as well, to 1,618 boats, a 5% pick-up. Reflecting a recent growth in inventories, the average time for a boat to sell also increased 10%, to 331 days.

Both power and sailboats sold better in 2011, each representing about half of the recorded sales. Power increased 40 boats to 817, a 5% gain, and the value of the powerboats sold climbed almost 50% to $400 million. Sailboat sales were up 6%, climbing 46 boats to 805, selling for a combined $123 million, and gaining 24% from 2010.

The biggest change in the European yacht brokerage market was the increase in sales of boats over 55′, which took off in the first Quarter. Compared to the same time period in 2010, sales increased from 83 to 128 boats, a 54% gain, and the total value of those sales climbed at an even faster rate. Sales in this category of boat in Q1 2010 were $177 million; a year later they were $321 million, a pick- up of 81%.

Although sales of boats under 35′ remained flat in Europe during Q1 2011, the middle of the market showed new signs of life. Among boats 36 to 45 feet long, 459 were sold, up from 421 a year earlier, and among boats 46 to 55 feet, 131 changed hands, up from 124. The total value of sales also increased modestly in those size ranges in Q1, up 8 to 10 percent. Adding weight to the gains was the fact that they reversed Q4 declines that were particularly significant in the 46- to 55-foot category.

The market cycle in the United States is in a different phase than Europe, according to yacht brokerage members of YachtWorld.com who reported their sold-boat prices. After a 2010 in which unit sales increased close to 10% and total valuation of sales increased closer to 20%, Q1 was a softer sales period. Sales of 5,851 yachts were a 2% drop from the same period in 2010, and total value fell 16% from $735 million to $618 million.

Powerboat sales were level with the previous year at 4,764 boats sold compared to 4,731 in Q1 2010. Sailboat sales, which are normally about 1 in 5 boats sold in the U.S. market, were down 12% to 1,087.

The total value of sailboats sold tells a different story, declining only 7% to $89 million, which means the average price of each sailboat sold was higher than the previous year. On the powerboat side, despite the same number of yachts selling, a drop in total sales value of $110 million, to $530 million, reflected a decrease of about 17% in the average price of each boat sold.

The decline in powerboat sales valuation in Q1 stemmed mainly from reduced sales of boats over 55′. Unit sales were 14% lower at 178 boats, and total valuation was off 36%, from $313 million to $200 million—all but a few million dollars of the entire decline in the market’s value, year over year.

Otherwise, the U.S. yacht sales market was relatively stable. Among all size ranges between 26 and 55 feet, sales were within a few percent of the previous year both in unit sales and in total value of sales. The number of boats sold under 26′ declined 6% and their valuation, 9%, but that only represented a drop of $3 million in yacht sales.

One other U.S. market indicator that diverged from Europe in Q1 was a reduction in the average time a boat was on the market. In Q1 2011, U.S. boats averaged 267 days before selling, down 6 days from Q1 2010. In Europe, the average time to sale went the other way, increasing by nearly a month, from 302 to 331 days.

Early indicators for Q2 sales in the U.S. were that big boats had started to sell again. April 2011 unit sales were up slightly for all boats over 46′ and $13 million higher in total sales valuation. That was just a taste of what was to come in May, however, when the trend intensified. Unit sales of boats over 46′ were higher by double digits, and the total value of the boats sold was up more than $200 million, or 160%.

Because of the relatively small sample size among the largest boats, the sale of a group of superyachts can swing market valuation suddenly, so it’s still too early to tell if such sales will continue through the Summer of 2011.

Year to date, through May, U.S. unit sales were still below 2010 sales by a few percent, but total valuation had crossed into positive territory, up 8%.

Measured against the 5-year average, unit sales were still lagging slightly behind the average set over the 2006-2010 period.

Source: YachtWorld