Looking through used aircraft pricing – is it just me or is there a bubble forming in the used and new aircraft market? A Cessna I tried to buy for $26k some 5 years ago is now listed at $60k.
The same applies to new aircraft, take the Cirrus range: price increased from 2017 to 2018 from $389k to $431k for the SR20 and from $530k to $601k for the SR22. the FIKI model increased even more (another $10k).
I have a suspicion we are at the top of the economic cycle and the above price increases, which support the used market are unsustainable. The main driver of the US buying market is the tax deferral game and once Trump reduces the income tax rate from 40% to 20% for corporates, half the incentive of buying the aircraft is removed. The accelerated depreciation is also being removed further indicating things are going to be become less favourable. Cessna are just delusional pushing their product in the mid $450k and Diamond DA40NG, doesn’t leave much change for $500k in 2018.
There is too much confidence out there and low interest rates have pushed luxury asset prices to Dutch Tulip levels.
Still a buyer’s market even if asking prices appear inflated. Hundreds of GA aircraft flying around 50 hours or less a year chewing cash.
You are quoting base mcodel prices it seems. You can safely add 10-20% to these numbers to get realisitc numbers for how they come out othe factories when properly equipped.
Plus of course, in Europe, as a private, you would have to pay 20% tax. Plus 10-20k for the ferryflight. Plus xk if you want it on a European register. Insane prices, and explains why only a few handfuls of them are built and sold each year.
Anyway, new aircraft prices are one thing, used prices for 40 year old aircraft are another, and they are not really connected. New aircraft prices know only one direction: up by roughly 5% every year. Used aircraft prices go up and down to some degree. Currently, they are indeed sky high in Europe, due to a decent economic situation, but even more so due to the realtively low fuel prices that we had in the last five years. If the go back to 2012 levels, used aircraft prices will go down again, particularly of those which need a lot of gas.
I suspect there are multiple “universes” involved.
Cirrus have still managed to keep the price going up and that must be supporting the used prices.
But all other SEP sales are very low in Europe – so low that they probably affect nothing. I doubt the price of a brand new Cessna or Piper supports their used prices because almost nobody is buying them, and the schools who still do buy some get special deals.
Also I think the price support effect disappears when it comes to old planes. Is a 1975 PA28, going for say 20k, supported by the new price? It doesn’t seem like it. When I got the TB20 in 2002, I paid 195k+VAT and soon the factory put the list price up to 220k, later 240k… I was offered my buy price for mine a year later! Few knew at the time that Socata made a decision internally in 2001 to drop the whole piston line 
It’s an interesting Q where we would be if they kept making the TB20/21 and they were still competitive (suitably tarted up, but still priced well below SR22 prices). Probably 500k. Would 2002 TB20s be selling for ~140k like they are now? I reckon so.
Generally I am told that prices actually paid are often 20-30% below those advertised, but nobody wants to admit that openly because the whole market would get marked down. Then you get silly stuff like this – a TB20 originally advertised for €240k.
I am not even looking at new plane prices, they are simply obscene in my opinion and a result of complete overregulation combined with liability and commercial interests. Add to that crazy certification costs which have to be brought back with very low volumes.
In the used market the prices have indeed gone up again after falling into a bottomless pit seemingly in the years before. Clearly, many of these are wet-dream wish prices for airplanes with outdated equipment, run out engines e.t.c. but for well equipped and maintanined planes, prices have come back to a degree where they should be, not where they sunk due to basically no buyers and lots of sellers. For SEP’s it really looks like we are going back to pre-2008 prices slowly.
Where the freefall is still very obvious is in the twin sector. Senecas, Twin Comanches and similar planes are still very low. The same goes for practically unsellable piston twins in the cabin class.
a result of complete overregulation combined with liability and commercial interests
I don’t see any evidence that Cirrus spend any significant money on certification (of what a 2017 SR22 has over the 2016 SR22) or product liability. I think an SR22 costs $1M simply because enough people pay it. I personally know a guy who buys a new one every 2 years. There is another one buys a new one every year. The initial Cirrus Jet customer got through 1 a year too; he owned nine of them in 8 years!
And I am sure Cirrus judge the price elasticity such that if they dropped it to say 500k the sales would not go up much – due mostly to the stock overhang of good used aircraft. The new ones go to people who want a new fresh leather smelling plane with the latest gizmos. The bonanza of a decade ago is finished and Cirrus are living off the “froth” on top of the coffee who can spend the money.
Where the freefall is still very obvious is in the twin sector. Senecas, Twin Comanches and similar planes are still very low. The same goes for practically unsellable piston twins in the cabin class.
It seems to be a largely European (not US) phenomenon. The avgas price, landing fees, etc, have gradually generated this.
The business jet market at all levels is quite predictable and it all makes sense. New aircraft sell steadily and at prices close to list in most cases. For example Cessna sell around 30 CJ4s a year, not a lot but they are over $9M each. At the heavy end it’s even bigger figures. Good business.
On older equipment the cost of upgrades and overhauls is exactly factored into the used pricing, hence the occasional low prices that get people excited (for a while until they do the sums). Out of production aircraft prices fall away.
Looking on AFORS, what surprises me is the money asked for microlight or near-microlight aircraft, compared to larger, more capable, but unfashionable aircraft.
Jodel DR1050, on permit, Robins and other certified aircraft with more carrying capacity, are cheap.
RVs are capable, and probably worth their price.
A lot of people are baffled by that… I guess that the more affordable something is (or is claimed to be) the more you can charge for it 
Maoraigh wrote:
Looking on AFORS, what surprises me is the money asked for microlight or near-microlight aircraft, compared to larger, more capable, but unfashionable aircraft.
Replace the word “aircraft” with the word “women” and you probably get the drift
