Sanctions against Russian billionaires and the seizure of their assets are making superyacht sales less popular.
In the past month, European countries have seized dozens of superyachts linked to some of Russian President Vladimir Putin's closest allies. The negative press surrounding the superyachts has made potential buyers leery.
Denis Suka, a private yacht broker who runs the popular luxury yacht-focused Instagram account, told Insider that these luxurious megayachts became the main focus when the sanctions started.
The sales were up, but now they are dropping. Suddenly, I had people who admired the Russian yachts attacking them on social media.
The number of yachts sold hit an all-time international record last year as the ultra wealthy sought more privacy and isolation.
There have been reports that the production of many superyachts has been stopped because of the G7 and EU sanctions.
One luxury yacht maker in Germany is trying to comply with local authorities by sending questionnaires to their clientele to check the ownership of their vessels.
The European yacht market is bracing for a squeeze as Russians move their business to the Middle East. Raphael Sauleau, CEO of Fraser Yachts, told CNN European buyers have expressed hesitancy since the Russian invasion of Ukraine.
The sanctions have had a direct impact on superyacht sales, but not for a lack of Russian buyers, according to a yacht consultant. Russian owners make up 10% of the existing yacht market and 18% of sales for new builds.
Bad press associated with superyachts has been the real impact.
She told Insider that a lot of people might not want to buy a yacht right now. The entire industry is trying to figure out how to clean up the image of the wealthy.
Suka told Insider that the global economic uncertainty caused by Russia's attack on Ukraine has made buyers hesitant to shell out money for a yacht purchase.
Suka said yacht prices are on the rise due to surging fuel costs and rising prices for commodities needed to build a yacht. In March, aluminum prices hit an all-time high. fiberglass prices have gone up as well.
If this war continues, we could see a price increase over $100,000 for some yacht builds.
The sanctions could have a cascading impact on the entire yacht industry, according to Kern Royer.
She said that the superyachts are not just a toy for the rich. They are responsible for employing thousands of people from designers to naval architects, shipbuilders, to captains, crew, and marina staff.
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