ANALYSIS | Wild horses can’t stop another Gold Coast spending spree

A week which began with the bizarre sight of escaped horses trotting down the Gold Coast Highway on Tuesday, took another strange turn on Saturday when the $12 million feature Magic Millions raceday had to be postponed due to poor weather and a shifty track. 

But inside the horse rail fences of the Bundall sales complex, seemingly walled off from the reality of an uncertain local and global economy, the Australian bloodstock industry pushed on with new records in the amount of money ($230 million) traded across the four days of Book 1 of the Magic Millions Yearling Sale.

Closed borders and the covid threatened to throttle commerce at this sale for the previous two editions, but instead it continued to grow. So if a global pandemic couldn’t put the brakes on things, what hope could record inflation, a global economic downturn and a few escaped horses have of putting out the fire.

It wasn’t the massive year-on-year growth of previous editions, but the plateau on which the Australian yearling market is now on sits at quite giddy heights. Ten years ago, when a future superstar in Winx went through the Gold Coast sale ring, the average price in Book 1 was $134,000. This week it was $294,000.

Sure, prizemoney may have doubled in that time, making Australian racing a vastly better commercial proposition, but the boom in the bloodstock market in that time trends well ahead of almost every other metric across the racing industry.

What was notable this year was that while the boom of recent times has been driven by a strong demand for colts from the so-called colts syndicates, who are trying to identify future stallion prospects, the 2023 edition was, in many ways, all about the fillies.

The price difference in terms of average between fillies and colts, was negligible, – $6000 in the colts’ favour. That’s a historically significant stat, especially when you consider that in the 2020 edition, just three years ago, that difference was close to $60,000.

Part of that has been Magic Millions’ ability to identify an opportunity in the market, targeting more quality fillies off the back in the extraordinary growth in the broodmare sector, which has given buyers much greater assurances on the residual value of buying yearling fillies.

“I thought if you had a high-end filly, they were very well sought after. It would be the first time we had the confidence that we had a good number of those fillies, a significant number,” Magic Millions managing director Barry Bowditch said. “They all found their level and were hard to buy and most vendors would walk away pleased with what they got from those fillies.”

The overall strength of that premium fillies market is best measured after the Inglis Easter Yearling Sale – it is possible that Magic Millions have successfully cut into Inglis’ traditional dominance in that area – but it’s hard to ignore that the average price of a filly, through the Gold Coast sale at least, has grown 33 per cent in just three years.

One of the other notable aspects of this sale was the steady return of international buyers. Over $21.8 million was spent by overseas buyers on the Gold Coast, up over $2 million last year. The volume of horses purchased by overseas interests also surged from 56 to 75, with an even spread of buyers.

Hong Kong registered buyers picked up 32 horses, five more than last year, increasing their investment by around $500,000, while Japan, primarily through Northern Farm, returned to the buyers’ bench, with four purchases. 

While the value of Australian bloodstock boomed through a covid period devoid of major international players, one of the key bulwarks against any possible future domestic return could be that increasing overseas demand.    

“It will take a while for all the internationals to come back to the table, but it’s good to see some new faces here and welcome back some old faces,” Bowditch said.

“I think we are the envy of the world with what we are selling, but also our racing, so they are going to continue to participate down here.”

Bowditch’s parochial assessment of the strength of the Australian industry is something echoed among almost anyone you talk to on the sales grounds. The only dissenting voices seem to be those being left behind, buyers shut out by the sky-rocketing prices, or the occasional vendor who has found it hard to get what they want out of the market.

The ceaseless optimism of the remaining 98 per cent ensures the booming industry is a self-fulfilling prophecy, The Kool-Aid was going down just as well as the beers in Queensland and while people believe the hype, then the hype will still exist. The constant prizemoney hikes, including those announced by Magic Millions on the eve of this Sale, feed the beast ever further. 

Is there a breaking point? The sales companies are aware of not getting too greedy when to comes to the volume of product on offer. Bowditch said Magic Millions is cognisant that when it comes to its main sale, there is no need to mess with the current format and size of catalogue going into 2024.

“Where we are right now, with logistics and capacity, is the right number. If it ain’t broke don’t fix it and I feel we have it to the right level,” he said.

“If the vendors support us with the same level of stock, then this is how it will look next year. The format has been tried and true for a few years now and it is working for us and it’s working for both the sellers and buyers.”

The fact that a couple of horses escaped from a PR event on the Surfers Paradise beach and the feature race meeting of the week was postponed until Thursday because of the conditions seem to be water off a duck’s back, when the wind is still so firmly behind the bloodstock market.

But the true test of 2023 will be in the retail market, The challenge is now out there the record number of trainers and syndicators who invested on the Gold Coast to go out and get the latest crop of yearlings sold down in an owners’ market which is most vulnerable to the cost of living hikes of the past 12 months.

That will be the determining factor as to whether those who spent so freely on the Gold Coast will be back in 2024.

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