I would say the GFC has partly contributed to the situation if not all of it with the 105 market taking off as a result of being pulled up itself. I guess none of us really understands how the world as a collective makes choices and it has now bestowed on the 105 GT/GTV step nose (possibly due to appearance and style which is generally admired, and racing heritage), to be a 'cool thing'. Because of the varied and changing connotations of cool, as well as its subjective nature it may change, but I doubt it! A 'cool thing' tends to be put into the luxury class! when was the last time you thought a vintage Rolex watch was 'not' cool? So prices will keep going up mostly, probably dependent on how many pristine show room conditions ones are available and really time to carry out a restorations, is in the 4+ years. The survival rates of the step nose cars I guess is 1 to 3 % of production, which puts the world total at about 2000 max, and say as a guess 500 are fully restored. My 67 GT Veloce will make it 501 in about 6 months, back to white original, but then again I should paint it light blue metallic and give it away as a wedding gift, like the recent electric powered light blue 1968 E-Type Jaguar.
Summary in economic lingo. The demand curve has shifted to the right from D1 to D2 due to Govt's around the world borrowing billions of dollars/Euros to gift to large corporations to prop them up for the sake of their country. This once in a lifetime windfall was spent by the corporations on a variety of things and allot on various luxury goods shifting the demand curve to the right D1 to D2. So the price went up and the quantity went up for luxury goods. The flow on effect was other hi-end commodities were sought and people all long the chain got something, so cashed up after selling your Italian classic for 400k, why not buy a GTA mmm too dear and a tightly held market what about the GT Sprint or GT Veloce step nose. The reality is the old supply curve S1 is fixed in the short term. Short term is defined by how long it takes to restore a car (4 years) and how many restored cars are on the market straight after they are finished? not many unless it is a business doing it! time and supply is limited and demand is high.
So people may try and convince me there are allot of 105 step nose cars out there and the supply curve will shift to the right S1 to S2 and prices will fall, I doubt this. If a car is in storage and has been up to now and it is not costing you too much to keep it there, should you sell it now or in a few years time? given prices have spiked in the last 2-3 years now would be the time to sell it as some owners of very rusty cars who have no use for them have! If the owners of the better cars may decide to keep their car, reducing quantity supplied so just when you expecting supply to move to the right S1 to S2, it could move to the left of S1 to S3 (the effect of passing on the car to younger family members in preference to the market), driving up the prices even more for better cars as you go up the demand curve D2.
I doubt there are thousands of 105 step nose cars in barns around the world unaccounted for, there may be around 50 or less of the last of the rusty hulks or half dozen daily drivers at best, you know car hunters stuff, we sit at the edge of our seat and watch it. Australia's import rules make it uneconomic to bring a car into the country now so virtually a closed gate. Not all houses/apartments come with a garages in Europe. Storage cost for a car are huge if you have to pay for it. You would be considered lucky if you had one under cover car park in one of the cities in Europe. Businesses take you goods once you default of on storage payment, you have seen the shows, so you really need to buy your garage spot in Europe.
Around the world how many cars do you know of that were chopped up to fix others or for scrap in your area?. When supply of replacement panels ran out as the factory was only expecting the car to survive 12 years after. So with parts panels scattered around the world you just or could not get them pre internet days, so what were people to do? You must of heard of 'Buy two cars, and fix one good one, then throw chop up the other to scrap. That is why they don't exist today so let's all stop kidding ourselves that there are thousands waiting to be discovered!
Here you have a car the 105 that was in fact made to last 30 to 60 plus years if looked after well. So today you are presented with three condition levels; very rusty cars not derivable need full restoration, daily driver cars need recommissioning and pristine restored.
I think there are three close to vertical supply curves SRusty, SDriver and SRestored. And there are 3 demand curves. Cars will move between groups and the delay is 4 years for a good restoration regardless of starting condition, assuming you have allot of NOS parts to start with.
Once the 'cool thing' effect reacts with a tightly held limited market supply we may see D2 demand curve shifting to the right to D3 again driving up prices and depending which car type you are after, rusty, driver or pristine you will see the price rise in some cases allot.
'Or do you think there is any possibility for prices to drop in the next 10 years in real terms'?
That is good question. People fixing the 105's still have to get to work buy petrol and other car/transport/train services and buys stuff, like food and power and car polish. Let's say these inflation cost add up for 10 years at 2.5% per year. UK consumer price inflation fell in March to 2.5%, the lowest rate in a year, according to the Office for National Statistics. Real terms means prices don't reflect inflation effects.
I will use a restored car as an example
Today a car you are interested in costs 50k pounds and you either buy it of you don't. If you don't the current owner puts on an extra 1200 pounds for inflation at the end of the first year so the price goes up to 51,500 pounds etc until the 10 years is up, by that time the car is valued at 64k, if you remove inflation effects it is 50k in real terms. So do I think the 50k pound car today will be worth more that 64k (50k real terms) in 10 years (64-50=14k inflation effects) mmm.
If in 10 years the price was 63k, then there was a drop in real terms of 1k car is worth 49k in real terms, what you are hoping for assuming consumer price inflation stays at 2.5% for 10 years.
Luxury 'cool' items from history tend to double in price with in 10 years, you would have to look at other comparable cars maybe E-types and Aston Martins. In 10 years it could be a 100k pound car, or (100-14)k= 86k in real terms, forcing you to pay an extra 36k in real terms if you purchased 10 years later.
Or you buy the car now at 50k pounds and enjoying driving it for 10 years. If you sell it at the end of the 10 years for 100k you will make a profit of 36k pounds in real terms less costs you will need to factor in for any loan and storage / maintenance etc.
Most of this is my personal opinion (except about some Govts bailing out some big corporations), you will need to seek your own paid financial advice and technical advise as to what suits you.
Best wishes Steve
I will keep looking for a pre-1975 Alfa...
