on 5 Jan 2023
Don't expect a shaky economy or an ongoing war to hit demand for superyachts in 2023
The superheated superyacht market will stay hot thanks to continued demand for new builds, while the brokerage market may finally see superyacht prices slowly coming down. That’s the verdict on superyacht prices in 2023 from Rory Jackson, Head of Superyachts for VesselsValue, a valuation and market intelligence provider for the shipping and superyacht industries.
Covid lockdowns led to a flurry of superyacht buying that started in 2020 and continued through 2021. In large part, it was due to potential buyers simply wanting to enjoy themselves while they could.
Brokerage prices firmed up as secondhand yachts were snapped up by eager buyers wanting to enjoy some time on the water. At first, 2022 looked to be more of the same. But then Russia invaded Ukraine, upending stock markets and sending energy prices soaring. The global economic outlook for 2023 is less than rosy.
Nonetheless Jackson believes that buyers can’t expect prices to soften for new superyachts, as any slack that existed in the market is gone thanks to the rampant buying that took place from 2020 to 2022.
Though there may have been some cooling in the brokerage market in 2022, Jackson still doesn’t think that a major downturn in pricing or market activity is coming in 2023. Yards are still receiving orders, with some yards booked up into 2026.
Stock markets took a beating in 2022, and the outlook for 2023 is uncertain at best. How much that impacts the appetite for superyachts is an open question, Jackson says
Stock markets took a beating in 2022, and the outlook for 2023 is uncertain at best. How much that impacts the appetite for superyachts is an open question, Jackson says. “There will always be an impact when the stock market falls, on peoples’ ability or willingness to buy a superyacht. But to what extent? That’s hard to tell because you are balancing it against a lot of other factors, such as the load of available slots.”
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He adds: “I think 2023 may prove to be underwhelming, insofar as I don’t think there are going to be any major changes now. Having said that, no one predicted the pandemic, no one predicted the war in Ukraine, so there may be big changes with big impacts. But if the market stays as it is, I think we’re going to see a slight cooling off in the brokerage market.”
For new superyachts, there are persistent supply chain issues and raw materials are more expensive. The shortage of supplies may even be causing delays to projects. Jackson recalls one lawyer saying that force majeure clauses were being invoked more and more on account of supply chain shortages.
And still, the appetite for new yachts remains strong, despite unforeseen disruptions in 2022. Jackson reckons that the negative publicity around Russian-owned superyachts has had less of an impact on the market than might have been expected, with any build slots that might have been lost going to eager American or European buyers instead.
“I think if this had happened a number of years ago (the sanctions levied against Russian superyacht owners), there might be more of a chilling effect, but the fact is, there’s so much demand, or at least there was in 2021 and early 2022, that it didn’t have as big an impact as it would have done during an extended trough in sales.”
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But while prices and queues in the new-build superyacht sector show no sign of letting up, a different dynamic is taking place in the brokerage market.
Jackson estimates that so much brokerage inventory was purchased in the boom of 2021 that the newer, quality inventory is largely gone. Older superyachts that may have been finding buyers at higher prices are now having price reductions, possibly giving the impression of a cooling market.
Jackson says that a lot of sellers have put their superyachts on the brokerage market only to be disappointed by price markdowns. In some cases, he says, that is due to brokers and sellers overpricing or hoping for too much in a heated market.
“On the brokerage side, we were simply never going to get the figures that we got in 2021. There was so much activity that the inventory has taken a hit. Obviously, the best projects went and a lot of them went before prices started increasing, but the numbers this year are still (at the end of 2022) stronger than they were in the years before 2021.”
Meanwhile, people who already own new superyachts are unlikely to put them on the market now, given that the wait to get a new, upgraded superyacht will take a long time. This further tightens the brokerage market.
“If you want to build a new one, that’s going to take a significant amount of time and it’s going to be more expensive because the prices are increasing and then if you want to buy something better on the market, there’s not that much to buy.”
Jackson notes that while new build deliveries may appear to slow in 2022 and 2023, it may be because deliveries fall short of orderbooks. This is due to supply shortages, and that may continue to boost the brokerage market. Demand simply hasn’t gone down yet.
“At the end of the day, everyone wants their superyacht.
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