Sailboat Market in Central Canada
and the Nature of Today's Used Market
To fully appreciate today's used keelboat market in central Canada, one has to go back to the early 1960s when the industry was just starting to build production sailboats out of fiberglass. Prior to this, recreational sailboats were generally made of wood. Not only were these very expensive to build, wooden vessels also required a great deal of effort and money to maintain. As a result, yacht ownership, particularly anything with standing headroom in the main cabin, was often regarded as the domain of the rich and the very rich.
All this started to change as manufacturers discovered the tremendous labour savings made possible by building boats out of fiberglass. For example, George Hinterhoeller built his first couple of Sharks out of plywood, but he didn't do this for long when he realized a fiberglass hull could be built with 18 hours of labour versus the 128 hours for the wooden hull. And it should be remembered that the use of plywood already represented a significant labour saving over the carvel plank technique that had been commonly used to build many wooden sailboats during the preceeding decades. In addition to making sailboats more affordable, the fiberglass hulls required much less maintenance than their wooden counterparts. This made it much easier for the average person to maintain their boats without costly professional assistance.
By the mid-1960s fiberglass was well entrenched as the medium of choice with most manufacturers, and the idea of buying "plastic" boats had gained public acceptance. Even more important was that the concept of yacht (sailboat) ownership was fast becoming a feasible objective for the average middle income wage earner. This set the stage for major growth of the recreational sailboat industry in central Canada and North Amercia in general. In fact, the late 1960s saw the emergence of some of the manufacturers whose models still dominate today's used boat market in Ontario and Quebec. This includes the C&C and Tanzer, although the two companies started off building boats at opposite ends of the size spectrum.
The recreational sailboat industry in central Canada really took off like wildfire during the 1970s. It wasn't just a case of fiberglass manufacturers making boat ownership more affordable - it was also that sailing caught on as a popular trend in central Canada and many other areas of North Amercia. Although the OPEC oil embargo of 1973 may have coaxed some people away from powerboating to sailing, it seems that this trend was simply a matter of the public being ready to latch onto sailing as a desirable and fashionable water sport and activity.
Well known companies such as Bombardier, Chrysler, and Yamaha, including powerboat manufacturers such as Bayliner, all jumped on the sailboat building bandwagon. It wasn't long before sailboats started to displace powerboats at many marinas and by the end of the 1970s, they also dominated many boat shows. For a while, used sailboats were actually appreciating in value, and consequently, the major banks attended boat shows and actually competed to provide loans to would-be sailboat owners.
So called "entry level" boats such as the Tanzer 22, CS 22, and Grampian 23 became very popular during the early part of the 1970s. However, "two-footitis" soon took hold with many of the owners of these boats, and it was not long before they were shopping for 25 and 26 footers with interior standing headroom. These slightly larger boats soon became the choice for more and more first time buyers, and the entire 20 to 26 foot size range became known for its "entry level" boats. Nonetheless, the trend to step up to something larger continued with many sailors, and the size of models offered by most companies grew with the demands of their clientele. It was not usual for a manufacturer that had earned a good reputation building a 22 footer to move up to something in the 26 or 27 foot range, and then on to a 30 foot model, and so on.
Needless to say, the 1970s were heady days for sailboat manufacturers in Canada. It was the time when many manufacturers and brand names established or consolidated their place in the market place. This included C&C, Tanzer, CS, Mirage, Hughes, Grampian, Aloha, Nonsuch, Paceship, Bayfield, Niagara, and so on. Many of these companies started to penetrated the large US market as well. This was particularly true of C&C Yachts. Although it was never the largest manufacturer, C&C established itself as one of North America's premier sailboat builders, and it introduced a numerous design trends which influenced the industry on both sides of the border. An example of C&C's stature in the industry can be found in the fact that at least one well known American manufacturer was running ads in US sailing magazines to promote a particular model by claiming that it was "as good as a C&C".
The Canadian sailboat market was at its peak at the beginning of the new decade. Indeed, the largest and most varied selection of boats available on today's used market dates back to the late 1970s and early 1980s. Nevertheless, there were already storm clouds on the horizon, and by the end of 1980s the sailboat industry in central Canada would have all but disappeared.
The first real signs of trouble came a couple years into the decade when the value of used boats in the 20 to 26 foot range started to drop a little, and there were some indications that the "entry level" market was becoming saturated. Manufacturers and buyers were discovering that, unlike road vehicles, a five or six year old fiberglass sailboat was still relatively young, and yet, it would cost thousands of dollars less, and come with much more equipment and sails than its brand new counterpart. As a result, many models started to compete with themselves on the used market.
With the exception of one or two new models, the bottom had fallen out of the "entry level" market by the mid 1980s. If the manufacturers were worried about this development, they didn't show it. Instead, many concentrated on the market for boats 28 feet in length and over, where "two-footitis" ensured a continued demand for a couple more years. However, this was only providing the industry with a short term reprieve.
If there is a date to mark the official beginning of the crisis for the sailboat industry in central Canada, it had to be early in 1987 when C&C Yachts went into receivership. This spooked the banks, and they starting pulling the plug on still otherwise viable sailboats manufacturers by calling in their loans and lines of credit. This is what the Royal Bank did to Tanzer with only one and a half hours notice in May of 1987. At the time, Tanzer was doing surprisingly well with its new line of French designed sailboats. Whatever the case, it was only a matter of time before most of the sailboat manufacturers would be forced out of business or would close their doors of their volition.
Companies that were able to retool and come out with new designs managed to survive until the end of the decade, and some even did quite well with certain models. This was true of the Mirage 29, the CS 30, and some other larger sailboats. A few companies, such as Ontario Yachts, even succeeded in weathering out the the industry-wide slump through the 1980s and 1990s by concentrating on custom or niche sailboat markets, and by building fiberglass components for non-marine applications. For example, Ontario Yachts built the fiberglass support for the pitcher's mound for Toronto's Skydome Stadium.
It is also worth noting that because of its stature in the industry, C&C didn't fade away easily. The financially troubled company underwent a succession of new owners and management teams in the late 1980s, but problems persisted. For the first time in 20 years, C&C failed to exhibit any boats at the 1990 Toronto Boat Show, and the company ceased operations shortly afterwards. However, barely a year went by before C&C was revived. With a new offshore owner, an operation which was still firmly rooted in Canada, C&C did quite well, and by mid 1990s it was on its way to making a remarkable comeback. Unfortunately, its factory at Niagara-on-the-Lake was hit by a devastating fire in the mid 1990s, and the company never really recovered. By 1996 its remaining assets and trademarks were sold off. Boats are still being build under the C&C name today in the US, but they have little to do with the company that was once so synonymous with the Canadian sailboat industry.
The early 1990s were dark years for the Canadian Sailboat industry. And it wasn't simply that major manufacturers were falling by the wayside. One of the better known Canadian magazines devoted exclusively to sailing folded, a national chain of mail order and marine retail outlets went out of business, and sailboats became difficult, if not impossible to find at major boatshows. Perhaps most surprisingly, slips at some clubs and marinas started going empty.
This last development was a bit a of shock for many facilities that were used to long waiting lists of people hoping to get a spot to keep their boat in the water. For example, in the early 1980s, one had to be quite determined in order to get a mooring or slip at well established clubs near a major center. With some yacht clubs, prospective candidates had to be sponsored by one or two current members, be prepared to cover an initiation fee of several thousand dollars, and then go on a waiting list for 4 or 5 years in order to get a slip or mooring for their boat. In the 1990s, shrinking membership rolls meant that many of these clubs found it necessary to make it easier for people to join by restructuring their regulations and fee requirements. And heaven forbid, some even had to resort to public advertising to recruit new members. (But a good number of people feel that this helped inject badly needed new blood into an aging membership at many clubs.)
One of the hallmarks of the sailboat industry in central Canada during the 1990s was a dramatic drop in price for many boats on the used market . For instance, at the beginning of the decade, the typical Tanzer 22 would come on the market for around $10,000, but within a couple of years, they could be found listed for around the $5000 mark. The price of some models dropped quickly and then stabilized, while the value of other designs decreased incrementally year after year. But whatever the case, this steep decline in prices was a trend which applied to most models in all size ranges of the used market, with the exception of a limited number of newer boats built in late 1980s.
Despite the low prices during the 1990s, many boats would languish on the used market for long periods of time. It was not uncommon to see a good boat at a reasonable price listed for sale for over a year, and even the really hot bargains could stay around for a month or two. And when sailboats did sell, it was often for 15% to 30% less than the asking price.
The downward trend of prices on the used market had to come to an end sooner or later, or else people would have ended up give their boats away. (In fact, people stuck with an unsold boat were starting to give them away to charities for the tax write off.) Although the expected turnaround was the subject of numerous false calls by industry watchers, it finally happened in the spring of 1998 when there was a noticeable increase in demand for used boats 27 feet in length and over. Within the next two years this new demand also spread to entry level boats in the 20 to 26 foot range, and the long slump in the sailboat industry finally came to an end in time for the new millennium.
The increased demand during the last few years is unlikely to result in a return to the heyday of the late 1970s and early 1980s for the sailboat industry in central Canada. It does mean, however, that prices on the used market have stabilized and, in some cases, have gone up a little. Further signs of turnaround can also be found in the fact that local sailing magazine are now a little thicker, sailboats are starting to reassert their presence at some boatshows, and there are even indications that waiting lists for moorings are starting reappear at certain clubs and marinas. The outlook has also improved for manufacturers of new sailboats. For example, Saga Yachts of St. Catharines, Ontario, has done well in recent years with its new Robert Perry designs, and 40 and 44 models are once again being built under the CS name in Markham, Ontario.
Now that prices are no longer falling on the used market, people may feel that they have missed out on the great deals that were available a few years ago. Fortunately, this isn't necessarily the case, especially for boats under 30 feet in length.
It is true that there may now be a slight upward pressure on prices during the busy spring buying season, and costs may have inched up a bit for certain models in all size ranges. Moreover, with the low value of the Canadian dollar in recent years, many of the better boats in the larger size ranges have been snapped up by American buyers. (In less than a decade, the value of the Canadian dollar dropped from almost 90 ¢ US to just a little over 60 ¢ US.) Increased demand from south of the border has resulted in a significant decrease in the domestic supply of (and higher prices for) the larger, better known, and newer models of Canadian built boats. This phenomenon is most noticeable when shopping for models over 30 feet in length which were built in the mid to late 1980s.
However, with exceptions noted above, prices remain low for a great many models on the used market, and significant increases are unlikely due to the age of many of these boats. Nevertheless, with the resurgence in the popularity of sailing, better boats on the used market can now sell very quickly, sometimes in a matter of weeks, or even days, during the peak buying and selling periods. Moreover, there is often less negotiating room in today's market for boats that are reasonably priced.
Despite these trends, the used market is starting to show its age. The large majority of used sailboats are now between 15 and 25 years old, a fact which will encourage more and more people to consider buying new in order to get a modern design or simply for the satisfaction of owning a brand new boat. Nevertheless, used boats will likely continue to be a major factor in the sailboat market for years to come. This is because it can cost as much as 400% more to buy the brand new equivalent of a used sailboat.
For example, it is not too difficult to buy a well equipped 26 footer in good condition on the used market for under $15,000. By comparison, the price of an equivalently equipped new 26 footer in today's dollar would be around $50,000, and probably closer to $65,000 when one factors in the cost of additional sails, furling system, outboard motor, electronic instrumentation, spinnaker and related gear, cradle, anchors, safety equipment, and so on. From this perspective, the buyer of the used 26 footer could easily afford to spend an additional $10,000 to $15,000 on refits and upgrades and still have a boat which would be considerably cheaper than its brand new equivalent.
Needless to say, age will also be a factor in the condition and life expectancy of a used boat. Again, this is becoming an important consideration given that many boats on the used market are now over 15 years old. But generally speaking, fiberglass boats which surveys well are perfectly good vessels which should provide many more years of service with routine maintenance and the replacement of worn out components. Even where a survey does identify a major problem, the boat is still worth considering if its price is sufficiently discounted, and a buyer is able to identify the full extent of the problem and cost of making the necessary repairs. For more information on this subject, see the article on Surveying and Inspecting a Used Sailboat.
It's also a good idea to have some reference point to judge the relative age of boats when comparison shopping on the used market. This is particularly important when considering a model which had a long production run spanning a decade or more.
Given that so many sailboats were manufactured in the late 1970s and early 1980s, they can be considered to be of average age in terms of the used market. Boats built in the mid to early 1970s can be viewed as little older than average, while anything dating back to the 1960s will generally be regarded as very old. On the other hand, boats manufactured in the mid to late 1980s will be considered newer than average, and most models from the 1990s will be treated as being almost brand new. It should be noted that Canadian built boats from the 1990s are fairly rare on the used market, and much of what is available in this decade will have been imported from the United States.
With all said and done, it appears that the used market will continue to be a good source of sailboats in central Canada for years to come. Happy sailboat shopping.
by Michael McGoldrick, 2001.
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