French catamarans and the falling euro

[Wellington]

I haven't checked the market since 2011, but I still receive a Yachtworld notification each time a broker lists a Lagoon 440. The asking price doesn't seem to have changed in four years, despite an ageing fleet. It would be useful to know the actual sale prices, especially in the last year, with the fall of the euro.
Sailing in the South Pacific, I always thought we would eventually sell in Australia, partly thanks to the strong AUD. But with the stronger USD, the value of our Lagoon 440, in US dollar terms, has dropped by nearly 30% in a year. I assume it has, and will have a significant impact on the market in the coming years.
Have some of you, currently in the market for a used 40-50 ft catamaran, noticed a recent drop in the asking price of French cats, made possible (for European sellers) by the falling euro?
Also, I would welcome information on the market for cats in SE Asia (Indonesia, Singapore, Malaysia, Thailand). Thanks!

[monte]

I haven't noticed any across the board movement in used or new European yacht prices and wouldn't expect to either. The only place I would expect prices to alter would be the US, given that it's now more affordable for them to purchase in EUD. So possibly some US buyers would be considering buying in Europe as opposed to the US and quite a few CF members have ordered new or used European boats due to the inflated USD. As with any currency, inflated dollars are good for imports, bad for exports. Not a great time to be selling a yacht in USD in Asia. Prices in Asia seem to be a lot less than Europe and the Caribbean, probably as it's the end of the milk run, rather than the beginning so a lot of sailors plan to buy in Europe and sell and fly home from Aus and beyond. I think your customer would be someone with USD wanting to buy in Asia, which I doubt there would be many of. Probably continuing on back to the USA would be the most cost effective solution for selling.

[Sand crab]

I get automated emails from brokers and some new models are offered at a good discount to dollar buyers. They are quoting the price in USD so no need to exchange and deal with that. For instance a Lipari is discounted 30%.

I also received an offer for a new Seawind 1000XL2 for $219K instead of the regular price of $265K. The boat is in mid-build and the buyer fell through. That price is at the factory in Viet Nam I think.

[monte]

SC, the brokers always like to spin things as if they're great deals. The fact is the USD has risen against the EUD so their discount is just the new conversion rate. Same goes for the Seawind.

[Sand crab]

I agree on the spin thing Monte but only a few models are offered with these discounts. I haven't seen any big promotions on the Helia or Sanya. And I think that Seawind is a one boat deal.

[monte]

Yes they may not advertise in the same way, but you certainly wouldn't want to be paying the same USD for a new Helia as you would have paid a year ago. The cost would be 20-30% less ( I'm not sure how much the USD/EUD has changed but a quick google will give accurate results). As far as the Seawind, Lagoon and FP also have what they call 'stock' boats. Usually these have been ordered by a client. They are in the companies system for production, even if no work has actually started on the specific boat. The production delay can be six to twelve months so purchasing a stock boat can mean avoiding the usual waiting period for delivery, but also it means you can't modify the original clients specifications. This can work for some buyers wanting to jump the production line. Pricing is not much different to if you make the order yourself but some saving might be possible, The savings on the Seawind are likely to be replicated on a new order with some negotiation with the broker/dealer. I'd assume delivery from Thailand, registration, duties and taxes, etc wouldn't be included before getting too excited!

[Rohan]

Originally Posted by monte

Yes they may not advertise in the same way, but you certainly wouldn't want to be paying the same USD for a new Helia as you would have paid a year ago. The cost would be 20-30% less ( I'm not sure how much the USD/EUD has changed but a quick google will give accurate results).

The difference right now is quite dramatic. The dollar and euro are almost at 1:1 parity. The same boat that would have cost me like $400K US dollars a year ago, is now more like $300K. I went to the Spring Boat show in Annapolis this weekend and no one gives specifics, but the general word I hear is that boat prices are going down, even in the US, where there still are expenses on the US side, like broker fees, etc.

You could really save the most by buying a boat in Europe and then sailing it over yourself.

[valhalla360]

OP: What is your money currently in?
- If you are sitting on a pile of USD, there are great bargains to be had in Europe.
- If you are sitting on a pile of Euro, your Euro dropped enough in value as much as the boat dropped in value, so you see no savings.

[SM6WET]

Actually the Euro has not really fallen, it has not risen much either. US dollars, NZ dollar, AU dollar and Brittish pounds have gone up so for you it may seem the Euro has fallen.

[Wellington]

Originally Posted by valhalla360

OP: What is your money currently in?
- If you are sitting on a pile of USD, there are great bargains to be had in Europe.
- If you are sitting on a pile of Euro, your Euro dropped enough in value as much as the boat dropped in value, so you see no savings.

We bought in euros. As we eventually plan to work and settle down in the EU after sailing, it means that our boat, for the same asking price in euros, should cost about 30% less for an American, about 15% less for an Aussie and about 20% less for a Kiwi than 2 years ago. Or am I missing something?

[monte]

That might be about right although your percentages seem 5% or so high. Your boats new cost has probably increases another 5% In that time as well. I wouldn't expect used prices to drop much, if at all, but demand might. As you can see, the currency exchange rates play the major part in boat values and unless you are buying and selling in the same currency you are effectively playing the stock market with any funds tied up in a boat. Some get lucky, some don't, and there's really no way to predict or mitigate losses when purchasing, unless you commit to some kind of foreword cover contract with a bank or forex company .When selling you can at least determine where In the world will likely give the best return, but in the mean time between listing and selling, currency fluctuations might cancel out any gains.
The AUD/EUD has been around 70 cents the last few years, I think as low as 67 and as high as 75, with the high being around 2 years ago. So buying at 75c as opposed to buying now would be about 10% less expensive

[valhalla360]

Originally Posted by Wellington

We bought in euros. As we eventually plan to work and settle down in the EU after sailing, it means that our boat, for the same asking price in euros, should cost about 30% less for an American, about 15% less for an Aussie and about 20% less for a Kiwi than 2 years ago. Or am I missing something?

If your cash is already converted to Euro, I wouldn't expect any savings due to the exchange rate fluctuations.

The only way I could see it having an impact is if the currency drop triggered a major meltdown in the European economy (not likely) in which case, prices may drop as people lose their jobs and can't afford to keep their boats.