Syndicators have reported continued voracious demand for racehorse shares, following a bumper annual Magic Millions sale on the Gold Coast, lending credence to the mid-market strength underlying racehorse ownership in Australia.
Some prominent industry players predicted an element of anxiety in the market leading up to the season-opening auction, amid suggestions of a slowing economy and rising interest rates, factors likely to erode the disposable income of Australian households—in contrast to the relentless demand for racehorse ownership during the Covid-19 pandemic.
However, record Magic Millions sales defied any such pessimism in the bloodbath industry, as unprecedented totals and averages were set on the Gold Coast.
While the strength at the top of the market was there for all to see, resulting in four lots over $2 million (AU) for the first time ever at the Magic Millions, the mid-market also played its hand, as syndicates splashed out in excess of AU$24 million during the seven-day sale.
And their confidence in the market appears to be justified, with one syndicate reporting that shares in all 10 of their horses bought last week were already “70 per cent sold”, less than 48 hours after the end of the Magic Millions sale on 16 January. .
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Victoria-based syndicators Bennett Racing spent AU$2,465,000 ($1,722,936) during the Magic Millions sale, breaking their record price paid for a yearling no less than four times as the operation secured AU$400,000 Schnitzel (US$279,584) filly, along with an AU$370,000 (US$258,615) colt by Zoustar along with Guy Waterhouse and Adrian Botha, AU$330,000 ($230,657) Extreme choice in foal to Ciaron Maher and a AU$310,000 (US$216,678) colt by the same Newgate stallion.
“The market has been very solid. I think it’s the strongest market we’ve ever been involved with,” said Nathan Bennett, director of Bennett Racing.
“All the nice horses were making good money and everything in Australia is going up (price). An old $150,000 horse is now $250,000, so if you don’t back yourself, you won’t be able to buy those horses.
Sales were brisk at the Magic Millions Gold Coast Yearling Sale
“The fundraising was fantastic. Out of the 10 horses we bought, we have about 70 percent of the horses sold. Some are pretty much done, others still have a little time, but 70 percent of all 10 is a good position to be in.”
Syndicates spending on record purchases was not an uncommon feature of the Gold Coast’s one-year sales. In addition to Bennett Racing’s new standard, Proven Thoroughbreds’ Jamie Walter received AU$470,000 (US$328,511) for a filly by Deep Fieldwhich topped the AU$450,000 Walter paid in 2021 for Proven’s winning filly Stroll.
Joe O’Neill’s Prime Thoroughbreds and Triple Crown Syndications last week saw their second highest price paid for a yearling; Darby Racing paid AU$1,705,000 (US$1,191,727) over eight years; while Star Thoroughbreds, the syndicate’s leading buyer with 11 purchases for AU$2.9 million ($2,026,984), paid the top price of AU$410,000 ($286,574) for a filly of I am invincible .
Dynamic Syndications was also active in the Magic Millions sale, buying 13 horses for a total of AU$2,040,000 ($1,425,878).
Three-quarters of the Capitalist brothers were among those parties, a Pierre a colt out of a half-sister to Fastnet Rock, and a Justify a half-sister foal to Group 1 winner Takedown.
Dinamic director Adam Watt spoke of how he believes the mid-market represents an opportunity on the Gold Coast, with that part of the market “not as strong” as he expected.
“We exceeded the quality of horses we wanted so we were delighted to be able to walk away with what we did,” said Adam Watt of Dynamic Syndications. “I think the market is a two-speed market right now, and I think that’s probably supported by the median and the sales averages.”
“The big stallion funds are going to unprecedented levels, but I thought there was incredible value for money in the mid-market. We left with three Snitzels, and two of them were real black mares.
“We thought some of those horses would cost a lot more than what we were able to get them for. I thought they would well and truly exceed our values for what we could go for with our budgets.”
Watt said Dinamic, which sold all of the horse shares it bought last year in November, was “ahead” of where it was 12 months ago in terms of taking shares from its clients.
“The takeover has been amazing,” he said. “People are still looking for quality.” It doesn’t matter what environment you are in, economically, people will still want quality.
“They still want to go out and buy BMWs and look at nice houses, and the blood market is exactly the same.” When you give people the opportunity to race three-quarter brothers with capitalists and horses from a half relationship with Fastnet Rock … we went out there and shopped really hard, and our clients responded in kind.”