Top 5 things to know about yacht valuations

When talking about what superyachts are worth, how often do suspiciously round, very impressive numbers with lots of 0’s on the end get thrown around?

Whilst it’s true that these assets can be worth an enormous amount of money, the real yacht values are tightly calculated, and it’s rare for any owner to simply pay the price tag without being certain that they are paying the fair market value.

Join me, VesselsValue’s head of superyachts, to explore five key considerations to bear in mind when calculating the true value of a yacht.

1) Price vs value

Price is simply a number in the form of a price tag attached to a vessel. It usually bears some correlation to the value, but this number is rarely paid.

The value of any asset, however, is quite simply what a buyer is willing to pay and what a seller is willing to accept, often a sizeable chunk lower than any advertised price.

To calculate the value of an asset such as a superyacht, trends are observed and parameters can be calculated from historical deals to predict the sale price – that is, the value.

2) Bigger is better

One of the most obvious trends is size. As with most assets, the bigger something is, the more it is worth. Colloquially, superyacht size is measured by the overall vessel length in meters or feet. More technically, size is measured in gross tons, which is a non-dimensional approximation of volume. Both length and GT are highly correlated with value. At VesselsValue we use both measures.

3) Modern is more valuable

Similarly, there is a strong relationship between how new a vessel is and its value. As vessels age, they depreciate, however not all yachts devalue at the same rate. VesselsValue’s analysis suggests that production yachts with planning hull forms (with larger, more expensive engines) tend to shed their value quicker than their displacement and semi-displacement counterparts. The larger custom yachts are observed to maintain their value for the longest.

4) Pedigree prevails

Not all yachts are born equal. Vessels built in Northern Europe from yards in countries such as the Netherlands and Germany command premiums against similar vessels built in more southern latitudes. Whilst the specifications of the yachts may be comparable, the pedigree and quality of the vessels constructed in the former region is considered exceptional and higher prices are therefore paid. VesselsValue has an algorithmically calculated ranking system that constantly adjusts premium and discounts for every shipyard worldwide, which are calibrated by recent sale and purchase activity.

5) The market moves

As with most markets, values aren’t static. Supply and demand forces are constantly changing and exhibit seasonality. New vessel features become more desirable (e.g. beach clubs and ice class), whilst others fall out of fashion (e.g. canoe sterns and dark interiors). Depreciation curves are also constantly changing and need regular calibrating to be representative of the current market. Further, superyachts depreciate at non-linear rates which are also functions of the exact vessel type. Values need to be constantly updated and refreshed, with eyes and ears all over the market providing a sense check. Emerging trends need to be spotted and reacted to accordingly, hence, VesselsValue re-values the entire fleet daily.

For more information about the methodology or to discover the values of some yachts, visit VesselsValue.

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