When Covid-19 first arrived in New Zealand last year and the whole country was put into lockdown, the shipping industry – like much of the economy – held its breath as it prepared for the troubled waters ahead.
“We thought people didn’t have to buy new boats during an economic downturn,” said Peter Busfield, executive director of the NZ Marine Industry Association.
“So we expected a pretty tough time.”
As it turned out, the opposite happened.
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Boat sales spiked as Kiwis emerged from lockdown in 2020 – a trend that has also been seen overseas – and there has been no going back since as demand (and prices) continue into the beginning of summer 2021 rise.
“We were pleasantly surprised that it had the opposite effect,” Busfield said of the arrival of Covid on our shores.
He said the number of new boat trailers registered in New Zealand so far this year (through the month of November) – new boats are not registered but trailers are – is up 8 percent compared to 2020.
“And last year was a good year, so the growth has continued … and that carried over to other types of boats – yachts and barges.”
Steve Clement is the owner of Hamilton-based Admiral Boats NZ, which builds luxury 10-meter sports cruisers that sell for around $ 500,000 and sleep five.
Clement said they will have built two new boats by the end of this year and plan to build three next year.
He and his small team can’t build it fast enough. People call, want to see the boats and ask Clement when he can build them.
“I’m telling people 2023,” he said, then added, laughing, “Man, how can we get them out faster?”
“That’s the best problem I think.”
For Steve Thomas, owner of NZ Boat Sales – which sells a lot on the high-end luxury side of the market – there just aren’t enough boats to meet demand.
âWe usually have a pretty good selection of boats until summer, but this year was very different. There was a real shortage of boats, a bit like the housing market – a lot of demand and not many boats for sale. “
He said part of the problem is that some boat owners in this price range are unwilling to sell and stick with what they have because of a lack of upgrade options.
There are also supply problems in the high-end new boat market, said Thomas, as people have to wait four or five years for some makes and models due to âhugeâ international demand and production capacities that cannot keep up.
“So that also has an impact, it drives up the demand for used boats of new models and also drives up the prices a little.”
WhangÄrei’s shipping industry carried out New Zealand’s largest yacht refit this year for a $ 60 million superyacht Senses.
NZ Boat Sales has a waiting list for buyers trying to find boats for them to get on.
“They’re bought pretty often before they’re on the market, before they’re advertised,” said Thomas.
âI think because people can’t travel internationally, they want to be able to spend time on the water at home. I suppose that means caravan sales and motorhomes and so on – it’s the same thing.
“What we also see are people making lifestyle choices … it’s about the joy of life, it’s not just about work, it’s about getting out and enjoying life with the family.”
Thomas said he has seen the price of certain boats, especially well-known brands, rise about 10 percent over the past 12 months.
He said price increases are “inevitable” as demand exceeds supply, as well as high inflation and problems with the global supply chain.
“People just expect it to happen, really … but what we’re seeing is a bit of frustration from buyers because we can’t get them on a boat they want to get on.”
At the other end of the market, demand is also high, if not higher.
“Life is good,” said Russell Hewitt, owner of Marine and Boating BOP Things.
Hewitt has operated its Te Puke-based company for more than 20 years, selling new and used boats, outboards, parts and accessories, and providing services and repairs.
He said he noticed a surge in sales right after the first Covid-19 lockdown last year, and it just kept “increasing, increasing, increasing”.
Marine and Boating BOP currently sells three or four boats a week, mostly on commission and mostly used.
Hewitt also buys and sells boats after they have been repaired, cleaned, and beautified.
He said that in addition to “new people coming on board” and buying their first boats, there are many long-time boat owners looking for an upgrade – a bigger or newer boat, or a new engine.
“A lot of the boys spend a lot more time on the water, be it fishing or just boating … they certainly use their boats more often.”
This also leads to more service and repair work for Hewitt.
He said there had been delivery problems and major delays in introducing new engines and parts into the country, which, along with high demand, had resulted in price increases. But that didn’t stop people from spending money.
“Whether parts, workshop work or sales – everything has just really picked up speed.”
Hewitt attributes the boom in the boating business to people not going on vacation abroad and having more money to spend.
He said a lot of their boat sales are through Trade Me.
In November, the number of boats listed on Trade Me increased 28 percent year over year, and in seven days of last week the site searched 110,000 boats, up 3 percent a week-in-week.
When Things Searched at the weekend, there were more than 9,000 offers for dinghies and rowing boats, jet skis, motor boats and yachts.
“We are currently seeing tremendous local demand for boats and marine equipment, which has remained constant since we closed our borders last year,” said Jayme Fuller, Director of Sales, Trade Me Motors.
âIf we look back on November 2019 before Covid, we saw a remarkable 194 percent increase in watchlists for entries in our boat and marine category last month on site.
“We believe this is because Kiwis are redirecting their overseas vacation money into items with large tickets that they can enjoy right here in New Zealand.”
In November, the average list price for jet skis, yachts and motor boats were all higher than last year.
Busfield of the NZ Marine Industry Association said that, unlike in the construction industry, there have been price increases for components sourced from overseas due to international scarcity and the additional shipping costs.
“And these are passed on by the suppliers, so that the manufacture of boats becomes more expensive.”
He believes, however, that the price increases have been kept at a reasonable level: “I have not seen any boat price gouging in public and kept their price increases to a minimum”.
Busfield said while buying a new boat has been delayed, supply has actually increased.
âPeople might think, ‘Oh, you can’t buy a boat’, well, we are making and importing more boats than we have in many years. It’s just that when demand goes beyond supply it feels like nothing is available to the buyers browsing, and that drives the second-hand market up.
“So it is not unrealistic for a 1 year old used boat to sell for more than the price of a new boat, as you can just buy the used one tomorrow while you may have to service the new boat for 18 months.”
Busfield said that the equity of people who own homes and real estate has increased significantly thanks to low interest rates, and this has impacted the number of people buying boats.
He said the government did a good job also propping up the economy during the pandemic and Covid-related stress and fatigue have made people want to take care of themselves and have a good vacation and break. They cannot do that abroad.
However, Busfield said not everyone in the shipping industry has benefited since Covid-19 arrived in New Zealand.
âUsually we have 600 cruise yachts and superyachts visiting and the players who specifically rely on this refit market – they are way down because we only get about 50 or 60 boats a year versus 600 because the sea line is there . âVery tightly closed.
“We lack this segment of business that suffered a major blow during Covid.”
He said that hopefully yachts can return to New Zealand from May 2022.
Meanwhile, the shipping industry companies that service and supply avid kiwi boats will continue to thrive this summer.
âWe are reminded that one in five New Zealanders goes boating every year, which is New Zealand’s biggest recreational sport,â said Busfield.
“People are aware of this activity and if they can buy their own boat they do.”