We walk you through the creation of our Marine-Review Used Boat Index and the current state of the 2nd hand boat markets. 20% more boats for sale now than same time last year.
The reason for our “Index”
About one year ago, in august, we started to notice cracks in the 2nd hand boat market after 3-4 years of explosive growth. Some people agreed – others said our opinion was completely wrong and we are (insert your own long list of synonyms for stupid). 2nd hand boat brokers especially came with the harshest of words.
But the pointers were there. Marinas I talked to in late ’22 said they had less enquiries. New boats were still in high demand. 2nd hand boats sold – but in our opinion they got price decreases put on quicker – and did not sell at the previous quite so inflated values during covid.
We thought long and hard about how to prove the market was narrowing? We are strong believers of supply and demand determines 2nd hand boat prices. So, if supply (the number of boats for sale) increases – demand have decreased. When demand decrease, the prices will go down.
The building of the index
We set out to collect data on the number of boats for sale on a lot of the popular websites. We do it by hand for the sites that “exclude” robots from reading data – and by advanced robots on websites that allow it. We already have robots for other high value items, used for investment sentiment calculations. So apart from the extra work with the few sites that don’t allow robots – it is fully automated. We track a LOT more individual data than what we are publishing today.
The index was calibrated to 100 on September 11th, 2022. So, if we call out an index 110 – it is 10% more than it was in September ’22. It works pretty much like a stock index to make it simple to understand.
We don’t assign weight to any number in the index or skew the numbers in other ways. The ONLY way we slightly modify the index is when sites change the way they count their own listings.
One website does not seem to be able to figure out how to add up the boats in their listings. Their total amount counters drop or increase, sometimes, with crazy amounts. And then a week later they revert.
Our system identifies those ups and down’s and if too crazy – we equalize the numbers. If the rest of the data collected from all other sites don’t show the same change, we know it was a web-developer on a mission, causing the noise.
The current 2nd hand market Index
The number of 2nd hand boats for sale vs same time last year – have grown by an average across all markets of 20% The result is we are already a lot above the peak number of boats for sale during last season.
If the trend continues like last year’s incremental increase – we will peak in mid-March 2024 with roughly 28-35% more boats for sale vs mid-March 2023.
There are a multitude of reasons for the market change. We had an explosive increase in boat sales the last 3-4 years. Covid pulled a number on all of us – causing people to want “local holiday”. The “Anti-Fossil” fuel league helped it by promoting “Low CO2” travel, helping sailboats sales.
But a lot of the new owners of boats had NO prior sailing experience or any boat maintenance experience. It is not cheap to own and maintain a boat. And new owners are starting to realise.
Now add a crappy northern EU and US summer – and we find a lot of “disgruntled” boat owners waking up to the realisation that boating might not be for them.
And to top it off – we have interest rates and inflation taking a good bite out of people spare cash for “toys”.
All in all a cauldron full of explosive reasons for boat prices stalling.
Our postulation is we are on our way into the opposite cycle – a complete implosion of the boat market vs the last 3 years of “explosive” sales. A lot will be “almost new” yachts – but watch out, as maintenance has most likely been “overlooked” by the inexperienced owners.
The current 2nd hand boats cycle
In general, north-western part of the globe (US & Europe) dominates boat sales and adverts in actual numbers.
Usually from “mid” summer (July) people start listing their boats for sale. There is a big inflow until about December where trends level off a bit but continue to climb slower until about mid-March. Then from mid-March until July – the 2nd hand boat availability declines as people start buying boats for the coming season.
Those are the overall and very general statistics. There are exceptions. Some countries like Sweden – the 2nd hand boat market almost disappear during the winter months, as many boats are taken into big storage halls. That, plus cold weather, limit sales potential. The boat adverts from Sweden contracts to about 1/5th of “high” during the winter. But often wintertime is the season where the “expensive” and newer boats get listed. So don’t discount looking in Sweden.
Sailboat vs Motorboat 2nd hand market
A lot of brokers say sailboat owners are more financially cautious and careful than motorboat owners. And the statistics seem to prove them right.
The biggest growth in boats for sale until this summer – was motorboats. Availability of motorboats continued to increase all the way through March ’23 and levelled off at about index 112 vs September ’22 levels. Sailboats on the other hand stabilised in October ’22 – and stayed around Index 104 “above” September ’22 levels all the way until early June ’23.
But this year in June – so a month before the general “lift-off” in seasonal sales – sailboats started being put up for sale. The bad summer weather in the north and high interest rates have possibly kickstarted the sales cycle for sailboats.
From early June until now – the number of sailboats for sale have grown from Index 104 (4%) to 115 (15%) – closing in on motorboats fast. The relative number of sailboats for sale is still growing faster per month than the number of motorboats.
The “post-covid” general new boat market
To really track new boat sales – it is good to follow “public stock listed” companies and their earnings reports. While public companies can mis-represent the truth – eventually the truth catches up – so they rarely misrepresent – but often have “read between the lines” messages in their statements.
One of those listed companies is Beneteau Group. It is a huge conglomerate that includes many boat factories and brands including Jeanneau and of course Beneteau Yachts.
Beneteau Group is still posting record sales even for first ½ of 2023. Part of the record sales is due to problems delivering boats in the periods before, as Covid impacted parts-supplies. The impact was the bookkeeping of the actual sales “moved” from 2022 to 2023.
Reading between the lines – Beneteau Group is waving the “caution” flag going forward. And remember – all accounting disclosures from listed companies are looking BACK in time. Not forward!
Beneteau say Dealership “stock” is now back to pre-covid levels – and interest rates impacting dealers so reading between the lines – dealers are limiting their purchase of boats to have in “stock” going forward. And with stock levels back to “normal” pre-covid levels – boats are not flying off the forecourts any longer.
Looking at the Beneteau listed share price – it has been dropping since June – despite the favourable accounts published. Today while finishing this – share-price is down by > 11%
UK and Brexit 2nd hand boat market
The UK market seems slightly more buoyant than the rest of the western markets. But cracks are starting to show there as well.
Due to the UK no longer being part of the EU – the British no longer have “VAT” included access to the large EU boat market. For a UK resident person buying a Yacht from the EU – no matter if EU VAT is paid or not – require said resident to pay VAT again on import. That add 20% on top of any EU boat purchase.
Apart from the VAT issue there can be some issues importing the boat as CE approval might have been put into question. But that might just have been “solved” so EU and UK will accept cross pond ‘Yacht certifications’ More on that later.
In effect, due to Brexit, the overall UK Yacht availability have “shrunk” – so less inventory = higher prices or higher prices sustained for longer. But as we said – cracks are showing, and inventory is growing.
But UK Brokers is crying out loud for more inventory. No inventory to sell equals no income. But a market crash is also income limiting.
As the new boat sales have stalled quite a bit in the UK income there is down. Dealers often earn more on 2nd hand boat sales than they do on brand new sold boats.
A few UK Yacht brokers have not figured out yet that the market is stalling – so they post Yachts for sale at “Mid-Covid” prices – some with prices 30-50% ABOVE current advertised pricing from other brokers. Bonkers! But pricing 30-50% above “competing” yachts means it is cheaper to PAY the UK VAT on import from EU.
But many of the UK Yacht brokers are now more realistic in their pricing.
But there are of course some boat buying fools around, who do not research the market, and pay 50% over market for an old banger.