The extraordinary surge in prizemoney in New South Wales and Victoria has made racing in those states more commercially appealing than ever and it is that boom which has largely fuelled the surge in average yearling prices in the uncertainty of the COVID era.
The most recent annual reports of Racing NSW and Racing Victoria point to the opportunities, with New South Wales participants racing for twice as much total prizemoney ($279 million) than they were 10 years ago, Racing Victoria reported a rise in total prizemoney of 52.5 per cent since 2015 to $252 million.
While the competition between the two major jurisdictions has undoubtedly led to some major challenges, especially when it comes to those issues that require a national approach, it has also driven a golden era for those investing in the game, especially in terms of getting return on that investment.
Gai Waterhouse and Claudia Miller at the Magic Millions Gold Coast Yearling Sale | Image courtesy of Magic Millions
What was notable from the Gold Coast is that for the first time ever at an Australian yearling sale, buyers from one jurisdiction spent more than $100 million, with a surge in investment from New South Wales, which spent just short of $102 million across 338 horses in Book 1.
Those results came off a 2021 Gold Coast Yearling Sale where because of border closures many of the leading New South Wales buyers and trainers could not attend. That saw investment from NSW drop to a historical low ratio of 38.8 per cent of the total gross in Book 1, or $77.2 million. In real terms, they purchased 30 fewer horses
This year New South Wales buyers contributed 44.4 per cent of the total gross, and purchased more horses, 338, in Book 1 than in any of the previous five editions.
Investment was led by Gai Waterhouse and Adrian Bott/Kestrel Thoroughbreds, who spent just short of $11 million, the Newgate/China Horse Club/Trilogy colts syndicate ($7 million), Chris Waller/Guy Mulcaster ($5.9 million) and Mick Wallace on behalf of the Freedman Brothers ($5.3 million).
| NSW | 338 | $301,435 | $101,885,000 | 44.38% |
| VIC | 266 | $305,752 | $81,330,000 | 35.42% |
| QLD | 103 | $229,102 | $23,597,500 | 10.28% |
| HONG KONG | 27 | $316,852 | $8,555,000 | 3.73% |
| USA | 15 | $425,667 | $6,385,000 | 2.78% |
| NEW ZEALAND | 14 | $318,214 | $4,455,000 | 1.94% |
| SA | 10 | $200,000 | $2,000,000 | 0.87% |
| WA | 5 | $150,000 | $750,000 | 0.33% |
| NT | 2 | $130,000 | $260,000 | 0.11% |
| TAS | 1 | $200,000 | $200,000 | 0.09% |
| ACT | 2 | $90,000 | $180,000 | 0.08% |
Table: Location breakdown of buyers, 2022 Magic Millions Gold Coast Yearling Sale
Victoria on the move
What is very interesting is that increased market share by New South Wales did not come at the expense of their counterparts in Victoria, who spent 35.4 per cent, or $81.3 million, of the total gross in Book 1. The confidence in investment in Victoria has been one of the major storylines of the Australian thoroughbred industry in the past five years and the Magic Millions statistics very much bear that out.
At the 2018 Magic Millions Gold Coast Yearling Sale, Victorian buyers were responsible for just 18.8 per cent of investment, spending $29.6 million. Over the subsequent four Gold Coast Sales, that market share has jumped to 22.4 per cent, 26.4 per cent, 33.9 per cent and now to that 35.4 per cent, or close to double what it was in 2018.
Sheamus Mills | Image courtesy of Bronwen Healy
In real terms, Victorian investment in the Gold Coast Yearling Sale has increased 174 per cent in five years to $81.3 million.
Another interesting aspect at this year's Sale was the trend towards Victorian buyers being active at the top of the market. The raw spend this year may have risen by $14 million, but the volume of horses actually bought in Book 1 by Victorians dropped from 279 to 266.
That meant that the average price of a Victorian-purchased horse was $305,752, a significant rise from the level last year of $241,523, but also enough to see Victorian buyers outpoint New South Wales buyers, who averaged $301,752. That is the first time that has happened and points to the burgeoning confidence of Victorian-based buyers.
| MM GC Ylg Sale | 35.42% | 33.84% | 26.43% | 22.36% | 18.75% |
| Inglis Easter Ylg Sale | - | 26.88% | 19.92% | 20.28% | 23.41% |
Table: Percentage of Victorian investment by dollars spent
The Ciaron Maher factor
A significant contribution to that has been the emergence of Ciaron Maher Bloodstock as the biggest buyer at the Gold Coast Yearling Sale over the past couple of years. That stable rightly regards itself as a national operation these days, but with the lion's share of its stable in Victoria, is gets the VIC next to its name when signing for yearlings.
Ciaron Maher Bloodstock signed for $13.2 million in its own name (across 34 yearlings), while it was involved in over $7 million more in partnership, taking its total haul to 51 lots across the Sale. It was responsible for just under 24 per cent of total spend for Victorian buyers.
Ciaron Maher at the Magic Millions Gold Coast Yearling Sale | Image courtesy of Magic Millions
Also making a splash was Sheamus Mills Bloodstock, which spent $3.5 million across three standout fillies as part of its fillies' investment, while the Rosemont Stud-led Victorian Alliance colts fund spent $3 million across three purchases. Bennett Racing, with 14 purchases, and Lindsay Park, with 12, were also very active.
That increasing Victorian investment is also evident, albeit to a lesser extent, through Australia's other major select yearling sale, the Inglis Easter Yearling Sale, which saw Victorian market share jump to 26.9 per cent last year.
The 2021 breeding sales seasons were also dominated by Victorian investment, with the Yulong-connected Written Tycoon Syndicate spending close to $20 million and Rosemont Stud spending upwards of $14 million.
Anthony Mithen of Rosemont Stud at the Magic Millions Gold Coast Yearling Sale | Image courtesy of Magic Millions
A two-state phenomenon
The combined effect of record investments from both states is that 79.8 per cent of spend in Book 1 at the Magic Millions Gold Coast Yearling Sale was from either New South Wales or Victoria. That's up from 72.6 per cent in 2021, 74.9 per cent in 2020, 66.9 per cent in 2019 and 65.3 per cent in 2018.
The proportion of spend by the two big states tracks similarly when looking at the Easter Yearling Sale, where combined NSW-Victorian market share was 76.2 per cent last year, 70.1 per cent in 2020, 66.4 per cent in 2019 and 65.4 per cent in 2018.
| MM GC Ylg Sale | 79.80% | 72.63% | 74.87% | 66.92% | 65.27% |
| Inglis Easter Ylg Sale | - | 76.21% | 70.10% | 66.44% | 65.43% |
Table: Combined percentage of NSW/Vic investment by dollars spent
The other notable trend for a state perspective from the year's first yearling sale was that investment from Queensland buyers fell by $10 million, with its market share dropping from 16.8 per cent to 10.3 per cent.
Much of that could be attributed to the reduced level of investment from Tony Fung Investments, which spent $11.6 million in partnership last year and under the moniker TFI just under $6 million in its own name this year. Although it was also involved in several other partnerships, most of which weren't classified as Queensland buyers.
The volume of horses from Book 1 sourced by local buyers at the Gold Coast dropped from 131 last year to 103 this year, but that number is actually larger than the three editions of the Sale prior to 2021. In crude terms, Queensland buyers purchased the horses New South Wales buyers didn't last year and this year the southerners took that market share back.
The global view
The other buyer location data of significance is the level of international investment in the Australian yearling market, something which has changed quite dramatically in the COVID-era.
Harry Herbert, Dane Robinson and John Warren
In the three Gold Coast Yearling Sales prior to the onset of the pandemic, the percentage of total spend by international buyers was 13.9 per cent (2018), 14.9 per cent and 12.1 per cent. In the past two editions, with international buyers largely shut out of attending the Sale by border closures, that has dropped to 8.8 per cent (2021) and 8.5 per cent (2022).
To give that a monetary context, the 2019 Sale saw international buyers sign for a record $25.4 million across 79 purchases, while this year that number was $19.4 million for 58 yearlings.
It is worth noting that international investors in this era are working closer with local agents or other buyers, meaning their investments are often recorded as local.
| MM GC Ylg Sale | 8.45% | 8.78% | 12.09% | 14.86% | 13.93% |
| Inglis Easter Ylg Sale | 12.04% | 30.51% | 20.35% | 21.73% |
Table: Percentage of International investment by dollars spent
The diminished level of international investment is something apparent through the Inglis Easter Yearling Sale in the COVID era as well. At the 2019 Easter Sale, there was $25.1 million spent by international buyers across 63 yearlings, in 2021, 38 yearlings were signed for by overseas investors with a total of $16.2 million spent.
International buyers are expected to make a strong return at the Easter Sale this year with borders opening up even further. That sets up a fascinating dynamic between a local market chock full of confidence and a global buying bench with pent-up demand. It promises to be some Sale.
