I have been frequently asked this question and, although it is early days, one familiar pattern is emerging. I have been in the industry since 1988, so when interest rates went rocketing and property crashed, I started exporting to mainland Europe in those pre-internet days.
What has been happening since 24th of June 2016 is I have sold a lot of really, super clean, original and unrestored machines. There is also a high demand for high-end classic motorcycles, such as Brough, Indian, MV Agusta and Vincent. Why is this happening now? When currencies are devalued investors run to tangible assets. Smart investors understand that more currency will be printed which devalues their cash reserves. So a tangible asset, such as classic motorcycles, classic cars, art, gold and silver are in limited supply. There are only so many Broughs in the world, you can’t print any more of them.
The same is happening with top end London property. An ex girlfriend of mine, who sells properties over £5,000,000 in London has never been so busy. The reason is that they are now cheaper to foreign investors because the pound has dropped so significantly. However, it is too early to say what will happen to sub £1,000,000 properties it is just too early. But there is definitely a correction coming in property, as the man in the street still only earns £25,000 a year and the first time buyer market has been destroyed.
Classic motorcycles are different to property. They cost a fortune to restore and are very scarce in comparison to the number of buyers wanting them. Prices of investment grade machines are far lower than the cost of restoration. However, machines that are not original, or require restoration, are not selling. Or if they are, they are very inexpensive. I haven’t seen a motorcycle actually sell or reach its reserve on Ebay for many months. Ebay has a blood bath for investment grade classic motorcycle. But, until the last few months, old crap that needs fortunes spending on it has sold on Ebay for more than an immaculate classic motorcycle needing nothing doing to it. Investors do not scour Ebay for their classic and I have not bought a classic motorcycle from Ebay in five years, and for good reason. Ebay is where people sell their old crap, or lovingly disguised old crap. This is just my, and many other professionals’, opinion and has been learnt by bitter and costly experience.
I am now being contacted by foreign buyers seeking investment grade classic motorcycles only. They don’t want anything requiring work, or that isn’t up to scratch. The UK investors I know with such motorcycles are not interested in selling and are happier to hold on to their machines, as they would rather hold on to such assets rather than swap them for cash, which is being devalued. They bought these machines as a five to ten year investment and they are being held in very strong hands.
The similarity between the market now and in 1988 is that export markets are opening. The difference in the market between now and 1988 is that there are absolutely no early signs of prices of top quality machines softening, in fact quite the reverse. In 1988, classic car prices, property prices, classic motorcycle prices fell almost on a daily basis. This was because the world had not been so well connected via the internet. Traders did not have their foreign buyers, like now, as we have been trading through out the world for over thirty years, rather than being solely dependent on the home market only.
Another dynamic that is already pressing prices upwards is the weakness of the pound. Most investment grade classic motorcycles are imported. The weak pound has forced up prices and customers are willing to pay extra to acquire the investment grade classic motorcycle they want. So prices are already increasing and there is a willingness to pay the extra.
So over the coming years expect classic motorcycle prices to harden up even more, for investment grade machines. For the projects, non-investment grade classic motorcycles and machines requiring un-quantified amounts of work, expect prices to fall. Everyone knows what it costs to sort these machines out when there are problems. For the investment grade classic motorcycles there will now be more demand from the export markets and from the home market as people run for the safety of tangible assets, rather than cash or bank products.
If you are interested in buying, or selling, an investment grade classic motorcycle, contact Paul Jayson at https://themotorcyclebroker.co.uk/
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