Brokers may be making positive noises about the trajectory of the sales market in 2014 but Bill Sanderson, Edmiston Partner and head of the company’s Palm Beach office, believes much of this is hot air intended to act as a smokescreen to hide a heavily compressed market.

In an exclusive interview with Sanderson, who has been a broker since the 1970s, and by his own admission, has seen plenty of economic cycles come and go, says the landscape of superyacht sales has changed for the long-term and the industry had better get used to it.

“Nobody except those involved in the deal know what a boat truly sells for. But I can tell you that owners who know the market are selling their yachts at prices that are 50 cents to the dollar of a realistic asking price; not an inflated asking price, a realistic one.” Those owners who can’t afford to absorb such a hit, Sanderson says, aren’t selling, hence the reason why many yachts are sitting on the market indefinitely. The sailing yacht market, he adds, is even more morose, with almost no market movement and those that sell, “going for pennies to the dollar!”

Sanderson is telling 2014’s clients to scale up their aspirations. “There has never been a better time to buy a yacht”, he says. The market is so stagnant that buyers are getting significantly more for their money. “There have never been better deals in all my time in the industry”, he continues. The problem is that the collective desire to buy superyachts isn’t what it used to be. Existing owners are happier refitting their current vessels or “boats that typically have 13 or 14 crew have three crew on board and are tied up not going anywhere.”

It is time for the industry to accept these constrained parameters, Sanderson says, and adjust its model accordingly. The vast majority of the fleet is ‘for sale’ and the second-hand inventory is insurmountable. Therefore, we need to adjust our thinking. “Anyone that thinks we’re going back to the good old days is being overly optimistic”, says Sanderson. Brokers need to be frank with sellers. Sanderson quotes an old brokerage idiom – ‘your first offer is always your best offer’ – but emphasises the importance of a new level of pricing. Yachts can no longer be viewed as the assets they once were, and the market will only move if brokers communicate that to their clients effectively.

It is not just the sales market that Sanderson feels is suffering. “I have sympathy for builders,” he says. “Because whilst brokers are going through a hard time, builders have materials and labour to consider, so they have very little room to try and accommodate buyers.”

“The arrogance of the builders has gone. Now they say to the clients, ‘here’s the price but we can work with you on that to get it down’.”

Whereas pre-recession superyacht purchases were often seen as investments that trend, in Sanderson’s eyes, belongs in a bygone age.  Today’s buyers have to really want the yachting experience “because it’s like a car – the day you drive it out of the showroom it’s worth 20 per cent less than you paid for it.”

And his message to the market going into 2014… “I would tell buyers that now is the time to buy a boat. And if sellers aren’t realistic with their pricing they won’t sell their boat. It’s not like you can hold your boat for another year and it will become rosy again; it’s not going to happen.”

Bill Sanderson, partner, Edmiston.

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