Context called for with Classic comparisons

A year-on-year drop in aggregate, average lot and clearance rate at the Inglis Classic Yearling Sale wasn't necessarily a sign of market doom and gloom according to stake holders, who called for some context and perspective when comparing figures from last year.

Last year's Inglis Classic Sale was the first held at the company's Riverside complex and the buzz of being the first to buy at the brand new facility created a market that exceeded all expectations.

A gross amount of $48,573,500, an average of $93,231 and an incredible clearance rate of 94 per cent were nigh on impossible numbers to match, but with a few other factors thrown in 12 months later – including a crippling drought in rural New South Wales and slumping economic indicators – meant statistics were down across the board.

Aggregate down

Despite 208 more lots in the 2019 Classic catalogue, the total spend dropped to $44,840,000, the average slipped to $76,650 and the clearance rate was 81% at the drop of the final hammer late on Tuesday.

Nearly everybody spoken to by TDN AusNZ pointed out that comparisons with last year's buying spree weren't fair and that the more like-for-like reference was the 2017 sale.

"The market can't just bubble along with 10 or 20% every year and if you compare it to 2017 it is still a very good sale," Duncan Grimley from Glastonbury Farm said.

"2018 went through the roof, and that just wasn't sustainable. I think the market is still trending up at a reasonable level."

Taking the outlier that was last year's revamped Classic Sale out of the equation creates a much clearer picture and the 2019 sale averages were actually up 7.44% on 2017.

"I agree that 2017 is a much more fair comparison," said Arrowfield's Bloodstock Director Jon Freyer, who said economic conditions, which include banks getting tougher on credit, a declining housing market and uncertainty created by upcoming elections, both state and federal, all played a part when it came to the sale's bottom line.

"When people see an election coming up they tend to freeze a bit," Freyer added.

New format and more horses

As well as the 208 more lots in this year's book 1, Inglis created the Highway Session with 205 extra lots to be auctioned on Thursday. While top lots still sold for big money, a Classic Sale record for highest lot was even set when Lot 609 was knocked down for $550,000, it was the bottom end of the sale that suffered with a high rate of passed-in lots.

Mike Fleming from Bhima Thoroughbreds said the extra numbers were felt in what most felt in that "soft bottom" of the market.

"That extra 20% of the catalogue that is struggling to filter down and find owners," he said, adding that the top end-buying spree for colts at Gold Coast Magic Millions Yearling Sale may have papered over the cracks of a soft lower end there as well.

"I think it's what happened in that bottom half of the market at the Gold Coast, and it was a tough market in New Zealand too," Fleming said.

Still, Fleming was another looking at the numbers with optimism.

"I think there is a little bit of realism back in the market, and that isn't necessarily a bad thing," he said. "I think, overall, the market is actually standing up pretty well.

"Last year, because it was the first sale, the vibe was great and there was a big push for it to do well. It is a type sale, not so much a page sale, but certainly the enthusiasm for the first sale here. It was a tighter book, everybody wanted to be here and see the complex, see how it worked and wanted to buy a horse here. This year has levelled back out to what we were in 2017 and it's not necessarily a bad thing."

No longer the domain of the battling trainer

Before the rapid growth of recent years, which has seen the sale jump from an average of $34,719 in 2014 to double that in the space of three years, the Classic Sale was once the domain of the provincial trainer like Kerry Parker, who has previously found diamonds in the rough like G2 winner and G1 placed Brilliant Light (Fantastic Light {USA}) for $32,000 at the 2007 sale.

"It was blown out of proportion last year, it got ridiculous," he said of the 2018 sale. "I had a client willing to spend $80,000 to $100,000 and we couldn't get near one we liked. This year there is a big difference," he said.

That boom market may have created an expectation from non-metropolitan trainers that the Classic Sale was now out of reach and Parker admits he came somewhat unprepared and expecting to be out of contention again.

"Well, I certainly didn't come here thinking I would be sticking my hand up all day," Parker said. "I came here to sound it out, really, thinking it could be strong again. But I certainly didn't expect the market to come back so much. It was a shock, I started realising "hang on, this is affordable", so after that first day there was a lot more confidence that we could actually come here and buy one."

After the day 1 downturn, Parker returned on day 2 to swoop on Lot 164 (Smart Missile) for $30,000, a price indicative of the soft nature of the market below the sales average. "We bought her full sister for $32,500, she goes well, so we came here for this one expecting that we would have to pay more because she was a better type," he said. "We also bought lot 217 by Choisir for $50,000, which was less than what we thought it would be. To some extent the sale has come back to what it used to be."

Climate conditions dire

Another factor affecting that lower range market are the extreme drought conditions facing rural New South Wales, southeast Queensland and parts of Victoria.

"If you go to inland Australia it is pretty dire," Duncan Grimley said. "They are the people that would come here and mop up those $20,000 to $60,000 bracket of horses. They probably don't have that many clients at the moment. Most people that live on the land have got rid of all of their cattle, or they are being forced to buy feed. All country towns are suffering and that could be why the market looks like it is. There is a large section of people that would normally be here that aren't, it has softened the bottom part of the market."

Like Bhima, Grimley's clearance rates were high and he suggested that those with consigned mares may have struggle to convey a sense of realism to their clients.

"People have expectations on what their horse is worth based on what they've paid for a service fee, sometimes we need to put the product they've got, it isn't showing enough reality to what they've paid," he said. "Most studs need to talk to clients to try and manage expectation."

Newgate Farm was leading vendor by aggregate, but even then, Lot 762 by I Am Invincible was expected by many to be the sales topper but fell short of expectations at $372,000. Despite that obvious disappointment, Newgate boss Henry Field was still looking at the bright side of what he called "a tough sale."

"Sure, we thought some might have sold better, but overall we have sold 33 out of 33 horses, so anytime you do that then it is a good sale."

Despite the changes to format, venue and clientele over the past few years, Field said the Classic Sale still carried much of the same DNA; an affordable sale where buyers value type over pedigree and come to buy a racehorse.

"The best thing about this sale is that generally the horses are going to good stables, we had a few colts today that we thought would hold their own in any sale in Australia but we bought them here to stand them out," he said.

"We thought they might have made a little bit more, but that's the market and going to the likes of Anthony Cummings and Lloyd Kennewell is great. We love selling a big draft here because they end up in good stables. Even if the market is a little soft, we had a top clearance rate and our horses are going into proper stables and that's what we need for our young stallions."

"We are really focused on selling runners off our farm, but if they don't go to the good trainers it makes it difficult. It was definitely stickier than last year, and it was hard work at times, but the good horses still made their mark."

Inglis managing director Mark Webster said changes in format and the balance of the catalogue would be looked at but was buoyed by the strong end.

"This year we had 37 yearlings sell for $200,000 or more," he said. "So the top end was pretty good, the middle market was down on last year and perhaps that does reflect on the quality of horses here, so we will go back and compare those."

After a slow start the vendors did seem to adjust and meet the market as the sale progressed. Day 1 had less than 80% clearance but that increased to 85 and 83% on days 2 and 3 respectively, and Webster was pleased with an overall clearance rate of 81%.

"We did have a slow start, but to get up to 81% clearance rate was a great effort," he said. "Credit to the vendors for working with us to get these horses sold. It hasn't necessarily been a sale where things just happened on their own, it has been a sale where there was a lot of hard work to get these horse's sold."

Webster also noted the absence of many of the country and provincial mainstays but maintained that Thursday's new Highway Session was designed with them in mind.

"A lot of those country trainers don't have the time, they can't do eight days of looking at book 1, they don't have the staff to do that so we designed this sale that suits them," he said.

"Just for some perspective, it was only five years ago that this sale was averaging $35,000 and it was seen as the best bargain hunting sale in Australia. So it has changed, we can't just look at last year and this year, over the past five years it has completely changed. To jump from $35,000 to nearly $78,000, with 320 more horses, If we pulled out those bottom 200 lots out of this year, and we do like-for-like, they were quite reasonable results."