Derrick Levy, CEO of Cape Town-based luxury yacht distributor Boating World, said he has 30 yacht sales in the works.
Despite the devastating drought and a tanking rand pushing South Africa’s economy toward recession, some South Africans are resilient, Levy said.
“Right now, South African exporters are coining it with the weak rand – people who earn in dollars,” he said. “There will always be people with money.”
South Africa’s yacht industry generates about $150 million per year, according to wealth analyst Andrew Amoils of New World Wealth, a Johannesburg research company, CNBCAfrica reported.
Angola and South Africa are top spots for yachting in sub-Saharan Africa while Morocco and Egypt are favorite yachting countries in North Africa. Yacht owners are mostly male, age 40 to 50, and earn more than $300,000 per year.
Cape Town is considered the gateway to luxury in Africa, CityPress reported.
Levy recently took Khuphukile Dube and his family out in Clifton, Cape Town, to test-drive a Fairline Targa 48 luxury yacht.
A luxury yacht would be a great investment, Dube told CityPress. Dube makes a living as a Brahman cattle breeder in Limpopo. Despite the drought, Dube’s 200 cattle and award-winning farm are in peak condition, he said.
His stud won the reserve senior champion red bull prize at the Thabazimbi Agricultural Show last year. He has spare cash to buy a new toy.
Levy said he’s sold multimillion-rand yachts and sports-fishing boats to buyers in Angola, Kenya, Sierra Leone and Uganda. He has two sales in the works to tobacco barons in Malawi.
Two years ago, he sold a 26-million rand ($1.6 million US) Fairline Squadron 65 yacht to Angolan oil shipping magnate Mauro Carvalho. Recent guests trying out yachts have included TV producer Dali Tambo and the family of Springbok hero, Bryan Habana.
Some people like to invest in yachts because they’re not fixed assets, Levy said.
So is buying a yacht a good investment?
Unlike real estate, luxury yachts are high-value assets that depreciate unless they are properly maintained, and maintenance is very expensive, according to Fort Lauderdale-based yacht seller 26NorthYachts. Expect to spend at least 10 percent of the cost of your boat on upkeep and maintenance every year.
“I rarely would advise purchasing a yacht strictly as an investment,” said blogger Mike Carlson. “The market for luxury yachts if far more complex than real estate.
Owning a yacht may not always be the best financial investment.”
Dube hasn’t made up his mind. “I’m still busy doing my homework,” he told CityPress. “I will watch the economy and make my final decision next month.”