According to the ‘Classic Car Auction 2014-2015 Yearbook’ - the annual fix for auction junkies, which is now sponsored by the suits at Credit Suisse - the global auction sale rate of 78% is the highest ever recorded in 22 years of market analysis by publishers Historic Selecta. Similarly, the number of sales over the magic one million dollars was again very strong, 243 $1m+ cars sold at auction compared to 245 in the previous season’s stats.
Latest classic car auction commentary: 27/11/2015
Yearbook authors Adolfo Orsi and Raffaele Gazzi conclude that the latest figures lend themselves to different interpretations. For factor in some important cars that did not sell, others that did, buy close to the lower end of the estimate, and the drop in in the percentage of sales recorded in European auctions in September 2015, and the impression is that there has been a natural, physiological slow-down in the increase in prices.
Analysing the trend in values, Orsi and Gazzi have seen, they say, a constant increase from 1996 right up until the 2008/9 economic crisis. After what, in the big scheme of things, was actually only a relatively brief banking hiatus, prices of such alternative investments as old motor cars then boomed again, seemingly without end since 2010/11.
The US market was – and continues to be – the most active, say the Yearbook authors. In their view, the values achieved in American auctions are a reference internationally, while European values tend to follow the America ones, albeit with a slight delay. They also point out that exchange rates, so often ignored by headline writers, are hugely significant in determining relative values.
For the prices of some models in the US have dropped, but due to the recent strengthening of the dollar, their Euro equivalent values have actually increased. The authors cite, for example, the average values of two cars that have become blue–chip over the last few years – the Mercedes-Benz 300SL Gullwing and Roadster. Their average dollar values have dropped by 5% and 11% respectively, but their values in Euros are 12 and 6% higher.
Although, latterly, even perceived to be gilt-edged stock, such as the Ferrari 250 California, as well assome other rare and desirable models, have cooled. And even some thought to be dead certs have died the death of silence under the hammer. A pair of hitherto hot F40s, for instance, one of them was not even swept up afterwards in what have been an increasing number of post-sale deals.
As a response to the stratospheric rise in Ferrari GTB values meanwhile, cheaper alternatives, such as the Daytona and other similar models from other marques, have been satisfying the demand for cars that have become unaffordable for buyers of only a season or two ago.
And highly significant to the market’s future, believe Orsi and Gazzi, is the noticeable arrival of new collectors, many a generation younger than collectors in recent years.
"Naturally, these new collectors tend to buy ‘younger’ classics," say the authors of what has become the definitive annual Yearbook. "There has been a significant increase in the number of ‘post-classics’ (ie those built between 1965 and 1974) and ‘modern’ classics (from 1975 to 1999) in the Top 100, with Porsche taking over from Mercedes-Benz in second place in the rankings of total turnover by marque behind Ferrari."
The investor-collectors’ favourite Italian marque continues to lead the market, the Yearbook compilers report, Ferrari having strengthened its position as market leader with seven cars in the Top 10 results 2014/15. 52 places in the Top 100 are also occupied by Ferrari sales, while Ferrari now accounts for 34% of total turnover in what, for the second year running, is again a $1b+ billion market and one that has exceeded 1b+ euros for the first time.
The Yearbook numbers crunch that a total of 576 Prancing Horses went to auction, 37% more than during the previous buying season. Although the average price paid for the increased number of Ferraris that were auctioned actually dropped by 21% (or by 12%, if you eliminate the previous year’s record 250GTO price from the 2013/14 results). This can be explained by the fact that more existing owners of Ferraris than ever before have attempted to cash-in their rolling assets in case the mood music stops.
Orsi and Gazzi underline the 100% sale rate of 1960s Ferrari models under the half a million dollar mark, such as the ten 250GTEs and the nineteen 330GTs. By contrast, the percentage sold rate drops dramatically for those cars over $1m in value. For of the nine 250GT Lussos on auction entry lists, only five of them sold, and of the eleven 275GTBs, only six found new owners.
As I have warned in this commentary before, the higher the prices, the fewer the number of players who will be able to pay them. There is a very real danger than most of the readers and surfers of most of the classic car press and digital media will no longer be able to afford or be interested in consuming the subject matter.