The industry that has boomed since Covid-19 arrived in New Zealand

Sunday, 5 December 2021

When Covid-19 first arrived in New Zealand last year and the whole country went into lockdown, the marine industry – like much of the business sector – held its breath and prepared for the choppy waters ahead.

“We thought, in an economic crisis, people don’t need to go and buy new boats,” Peter Busfield, executive director of the NZ Marine Industry Association, said.

“So we were bracing for a pretty tough time.”

As it turned out, the opposite occurred.

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Boat sales soared as Kiwis emerged from lockdown in 2020 – a trend also seen overseas – and there has been no going back since, with demand (and prices) continuing to climb as we enter summer 2021.

“We were pleasantly surprised it had the reverse effect,” Busfield said of Covid’s arrival on our shores.

He said the number of new boat trailers registered in New Zealand so far this year (to the month of November) – new boats aren’t registered, but trailers are – has increased by 8 per cent compared with 2020.

“And last year was a good year, so the growth has continued on … and that’s gone through to other types of boats – yachts and launches.”

Steve Clement is the owner of Hamilton-based Admiral Boats NZ, which builds luxury 10-metre sports cruisers that sell for around $500,000 and can sleep five people comfortably.

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 them fast enough. People are calling wanting to look at the boats and asking Clement when he can get them built by.

“I’m telling people 2023,” he said, before adding with a laugh, “man, how can we get them out quicker?”

“It’s the best problem to have, I guess.”

For Steve Thomas, owner of NZ Boat Sales – which sells a lot in the high-end, luxury side of the market – there are simply not enough boats to meet demand.

“Normally we’ve got quite a good selection of boats for sale leading into summer, but this year it’s been quite different. There’s been a real shortage of boats, a bit like the housing market really – a lot of demand and not many boats for sale.”

He said part of the problem is some boat owners in that price range don’t want to sell and are holding on to what they’ve got for now because of a lack of upgrade options.

There are also supply issues in the high-end new boat market, Thomas said, with people having to wait four or five years for some makes and models due to “huge” international demand and production capacity that can’t keep up.

“So that’s having an impact as well, that’s pushing the demand for late-model, second-hand boats up, and pushing the prices up a little bit too.”

NZ Boat Sales has a waiting list for buyers, and is “trying to find them boats to get into”.

“They get snapped up quite often before they get to market, before you see them advertised,” Thomas said.

“I think because people can’t travel internationally, they want to be able to spend time on the water at home. I suppose that translates to caravan sales and motorhomes and all that sort of thing – it’s the same thing.

“What we are seeing too is people making lifestyle decisions … it’s enjoyment of life stuff, it’s not all about work, it’s about getting out and enjoying life with the family.”

Thomas said he has seen about a 10 per cent increase in prices over the past 12 months for certain boats, especially brands that are well known.

He said price rises are “inevitable” with demand outstripping supply, as well as high inflation and global supply chain issues.

“People are just expecting it to happen, really … but what we are seeing is a bit of frustration from buyers because we can’t get them into a boat they want to get into.”

Demand is also high, if not higher, at the other end of the market.

“Life’s good,” Russell Hewitt, owner of Marine and Boating BOP, told Stuff.

Hewitt has been running his Te Puke-based business for more than 20 years, selling new and used boats, outboard motors, parts and accessories, and providing services and repairs.

He said he noticed an uptick in sales straight after the first Covid-19 lockdown last year, and it has just kept “increasing, increasing, increasing”.

Marine and Boating BOP is selling three or four boats a week right now, mostly on commission, and mainly second-hand.

Hewitt also buys and on-sells boats after repairing, cleaning and dressing them up.

He said as well as “new people coming aboard” and buying their first boats, there are a lot of long-time boaties looking for an upgrade – a bigger or newer boat, or a new motor.

“A lot of the guys are spending a lot more time on the water, whether it’s fishing or whether it’s just general boating … they’re certainly using their boats more.”

That’s also leading to more service and repair work for Hewitt.

He said there have been supply issues and major delays getting new motors and parts into the country, which, along with the high demand, has led to price increases. But that hasn’t stopped people spending.

“Whether it’s parts, whether it’s workshop labour, or whether it’s sales – everything has just spiked up.”

Hewitt puts the boat business boom down to people not going on overseas holidays 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 by 28 per cent when compared with the year prior and, in the space of seven days last week, there were 110,000 searches for boats on the site, which was up 3 per cent week-on-week.

When Stuff browsed over the weekend, there were more than 9000 listings for dinghies and rowboats, jetskis, motorboats, and yachts.

“We’re currently seeing huge demand for boats and marine equipment onsite which has remained consistent since our borders first closed last year,” Trade Me Motors sales director Jayme Fuller said.

“If we look back to November 2019, pre-Covid, we saw a remarkable 194 per cent increase in watchlists for listings in our boats and marine category onsite last month.

“We reckon this comes down to Kiwis redirecting their overseas holiday funds into big ticket items that they can enjoy right here in New Zealand.”

In November, the median listing price for jetskis, yachts, and motorboats were all up year-on-year.

Busfield from the NZ Marine Industry Association said, no different to the construction industry, there have been price increases on components sourced from overseas, due to shortages internationally and the additional shipping costs.

“And those are being passed on by the suppliers, so there’s an increase in cost to the manufacture of boats.”

However, he believes the price increases have been kept at a reasonable level, “there hasn’t been any price gouging that I’ve seen, I think that even though there’s an acute shortage, manufacturers in New Zealand have been pretty sincere with the boating public and kept their price increases down to a minimum”.

Busfield said while there is a delay in buying a new boat, supply is actually up.

“So people might think, ‘oh, you can’t buy a boat’, well, actually, we’re manufacturing and importing more boats than we have for many years. It’s just that when you get such an excess of demand over supply, for those purchasers shopping around, it could feel like there’s nothing available, and that is pushing up the second-hand market.

“So it’s not unrealistic that a 1-year-old second-hand boat will sell for more than the price of a new boat because the second-hand one you can just go and buy tomorrow, whereas the new boat you might have to wait 18 months.”

Busfield said people who own houses and property have seen their equity increase substantially thanks to low interest rates and that has had an impact on the number of people buying boats.

He said the Government has also done a good job in propping up the economy during the pandemic, and Covid-related stress and fatigue has led to people wanting to look after themselves, and wanting to have a good holiday and break. They can’t do that overseas.

However, Busfield said not everyone in the marine industry has benefited since Covid-19 arrived in New Zealand.

“We normally get 600 visiting cruising yachts and superyachts and the players that rely specifically on that re-fit market – they’re well down because we’re only getting about 50 or 60 boats in per annum versus 600 due to the sea border being very tightly closed.

“We’re desperately short of that segment of the business, which has taken a big hit during Covid.”

He said hopefully from May 2022 visiting yachts will be able to return to New Zealand.

In the meantime, the marine industry businesses servicing and supplying keen Kiwi boaties will continue to thrive this summer.

“We’re reminded that one in five people in New Zealand go boating every year, it’s New Zealand’s largest recreational sporting activity,” Busfield said.

“People are aware of that activity and when they can buy their own boat, they’re doing so.”