Every week, a huge cargo ship loaded with freshly purchased superyachts enters the Port of Newcastle.
Australia’s super rich, for whom Covid-19 flight restrictions have hampered their holidays abroad, are pouring their leisure dollars into superyachts instead, a sign of high confidence levels in the Australian economy.
But yachts aren’t the only asset class enjoying the post Covid-19 boost. Australia’s strong recovery, coupled with 12 months of pent-up demand, has seen an explosion in luxury transactions – from yachts, to cars, to diamonds.
This week the National Australia Bank reported that business confidence hit a record high in April, jumping nine points to a record 26 index points.
All three elements of the monthly survey – trading, profitability and employment – recorded new highs, with NAB’s chief economist Alan Oster calling the result “simply stunning”.
“It looks like we have moved past the rebound phase of the recovery and are now seeing healthy growth in most of the economy,” Oster said.
Iron ore prices have also soared to record highs, an international nod to Australia’s economic stability.
Richard Morris, who is the founder of Australian Superyachts and manages international yacht transactions and importation, says economic confidence has been turning around since last summer.
“When people realised the economy hadn’t failed and Covid-19 was relatively contained, they turned their attention to summer,” he says.
“But because they couldn’t fly to Aspen or Chamonix for their usual skiing holidays, they’ve bought themselves a boat instead.”
Sales in second-hand luxury yachts have soared, with Morris facilitating tens of millions of dollars in transactions each month.
He points out that new boats are taking several months to build so local buyers are acquiring second-hand yachts, complete with crew, that have been languishing in Europe for more than 12 months.
“We’re shipping them from Europe to Newcastle to Sydney, and the marinas are filling up,” Morris says. “Covid’s turned out to be a boon for the marine industry: there’s jobs for crew, fuel, provisions and service providers. We’re capturing all that money that’s usually spent overseas.”
High-end luxury cars are also enjoying the fruits of high business confidence levels.
Demand for the Maserati MC20, the Mercedes GT Black Series and the McLaren 765LT have stepped up a notch as travel remains limited.
“The economy’s fine and business is good for our guys,” says one supercar broker, based in western Sydney.
“There was a wobble last year when they didn’t know what was going on, but now there’s a real fear-of-missing-out mentality and they’re spending up big.”
New car sales more broadly also hit record highs during April, up 137.2 per cent over the same period last year.
“New vehicles sales are a direct reflection of the performance of the broader economy in terms of consumer and business confidence,” said Tony Weber, chief executive of the Federal Chamber of Automotive Industries.
Like yachts, there are still issues around auto supply constraints, with global factory closures, a semiconductor shortage and the Suez Canal blockage hampering supply.
But business confidence is sound enough for customers to wait months for delivery on a super luxury vehicle, brokers report.
While vessels and vehicles involve some logistics, diamonds and jewellery are much simpler to manoeuvre and are in just as high demand.