2022 Forecast: New Build Slots Dry Up As Pressure On Inventory Continues [In the News]

A dearth of new build slots and consistent pressure on inventory are key challenges facing the brokerage market in 2022 as demand continues to outweigh supply.

This article was featured on BOAT International in January 2022 and was written by Miranda Blazeby

Last year, the market enjoyed a record-breaking year, with a 71% increase in superyacht sales – the highest number since records began in 2008. The pandemic continued to play a starring role in this demand, with buyers lured by the freedom of yachting in a world of international travel restrictions.

This momentum, which began in the latter half of 2020, has continued into early 2022, with brokers reporting continued pressure on inventory and almost no new build slots available.

“The year hasn’t started quietly,” says Denison Yachting superyacht director Ben Farnborough. “Clients are ordering new construction projects and they’re buying brokerage boats in all shapes and sizes.”

Richard Lambert, head of sales at Burgess, adds that the lack of availability at shipyards is putting additional pressure on the brokerage market. “Clients are facing a wait of five years and they want something now,” he says.

Indeed, the next available delivery slots at the majority of top shipyards are estimated to be in 2025-2026. This, according to commercial director of Edmiston Alex Koersvelt, is piling even more pressure onto the second-hand market. “Clients that do not wish to wait will need to focus on the brokerage market instead,” he says.

However, the sales surge of 2021, which saw a total of 723 superyachts sold– a 71.7% increase on 2020, has left a shortage of quality stock.

“There’s a certain lack of quality yachts for sale and there’s still a lot of interest out there,” says Lambert.

Camper & Nicholsons yacht sales advisor Tommaso Bilotta agrees, revealing that yachts are now spending a significantly shorter time on the market.  “Before the pandemic, a yacht might spend six to eight months on the market,” he says. Now  “with the right price they can last a month or even a week”. He adds he can receive “two to three offers” for a yacht as soon as it is listed.

Price increases on brokerage yachts is a direct consequence of this. Market analysis for January 10-16 showed price increases placed on the 26.8m Sunseeker LI-JOR, 28.23m Riva yacht TAURUS and 25.15m Sunseeker FAR TOO XSIV, totalling nearly €600k.

2021 in numbers

723 yachts sold

684 motor yachts sold

39 sailing yachts sold

€10.4m – average asking price

36m – average length of yachts sold in 2021

331GT – average interior volume of yachts sold in 2021

12.5 years old – average age of yachts sold in 2021

Despite the strength of the market, Bilotta says increased prices on brokerage yachts are unjustified.

“How can you tell the market a yacht five or six years old is worth more?” he asks. “Yes, the market is busy and people are willing to buy, but at the right price.”

Increasing prices have also been tracked across the new build market but this, Bilotta says, is understandable, as they are rising in line with the cost of steel and aluminium. “There is an increase in the cost of the supply line,” he says.

There are signs of hope for brokerage inventory however when many new yachts on order launch later this year.

“It stands to reason that with a lot of yachts launching there should be some good quality brokerage boats coming to market,” says Farnborough.

In the meantime, many buyers are purchasing “interim boats” as they wait for better stock to enter the market or the delivery of a new build yacht.

“Clients realise that the wait for the boat they really want is going to be some time,” says Farnborough. Interim yachts are predominately being purchased by first-time buyers while existing owners wishing to upgrade are holding off from listing their yachts at all in the knowledge there is little to move onto.

“Many owners are holding onto their boat because they know they can sell it for a price close to asking,” says Bilotta. “If you don’t have a boat and you’re a first-time buyer you have to compromise, buy an interim yacht and wait for another opportunity to pop up.”

Despite pressures on the market, it remains a “very good time to sell”, Lambert says. “We know these conditions won’t last forever.”