Over the past few years, the world of Japanese Domestic Market (JDM) classic cars has experienced a meteoric rise in value, capturing the attention of enthusiasts, collectors, and investors alike. Iconic models like the Nissan Skyline R34 GT-R and the Toyota Supra MK4 have seen their prices skyrocket to levels that would have been unimaginable just a decade ago. However, the rapid inflation of these prices, especially among the so-called “second tier” JDM classics, raises the question: are we starting to see the beginning of a market correction?
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The Surge in JDM Classic Car Prices
It’s no secret that JDM classic car prices have increased significantly in recent years. High-demand models, often referred to as “top tier” JDM classics, have always commanded a premium. Cars like the Nissan Skyline R34 GT-R, the Toyota Supra MK4, and the Mazda RX-7 have long been the poster children of JDM culture. These vehicles, revered for their performance, design, and cultural significance, have become highly sought after, with prices reflecting their legendary status.
Even before the global pandemic, these cars were not exactly what you would call affordable. But the combination of COVID-19 inflation, the general mania surrounding used car prices, and a growing global appreciation for JDM culture has driven these prices to dizzying new heights. Enthusiasts worldwide found themselves willing to pay ever-increasing amounts for the chance to own a piece of automotive history.
What might be more surprising to some, however, is the significant price increase seen in the so-called “second tier” JDM classics. Vehicles like the Subaru WRX STI, which were once considered more accessible to the average enthusiast, have seen their values soar as well. I recall a time not so long ago when you could purchase a mint condition late 1990s WRX STI for under $15,000 NZD. Fast forward to recent times, and that same car could easily fetch $50,000 to $60,000 NZD or more.
Has the Market Reached Its Peak?
But have these prices risen too high? There are signs that the JDM classic car market, particularly in New Zealand where Garage Dreams is based, might be experiencing a shift. While we don’t have hard data to back this up, anecdotal evidence suggests that the market for JDM classics might be cooling off—especially for the lesser-known or less desirable models. We check TradeMe (local key classified site), dealer and marketplace listings regularly, and are seeing some definite price reductions and vendors being more realistic in their pricing.
The reasons behind this potential market adjustment are multifaceted. One significant factor could be the simple law of supply and demand. As prices reached unprecedented levels, potential buyers may have started to question the true value of these vehicles. After all, while the top-tier models have a certain timeless appeal, not every JDM classic holds the same cultural or performance significance. As such, the once rampant demand for these “second tier” classics might be tapering off, leading to price reductions.
It seems a key factor in the crazy increase in JDM classic car values was a case of the “greater fool” theory playing out, as is often the case in speculative mania. Basically buyers seemed to be purchasing because it was certain that even if you paid too much, there was always somebody willing to pay even more. Once that phenomenon ceases, reality can quickly return to pricing.
Another factor could be the broader economic environment. With the global economy facing uncertainties, discretionary spending on luxury or collectible items, such as classic cars, may be seeing a decline. In New Zealand, where the economic outlook has been challenging, it’s possible that fewer buyers are willing—or able—to invest in high-priced JDM classics. This could be contributing to the softening of prices.
Furthermore, as more classic car enthusiasts begin to recognize this potential downturn, we could see an increase in the number of vehicles being listed for sale. This increase in supply, coupled with a possible decline in demand, could further drive down prices, particularly for models that were never in the same upper league as the Supra or Skyline.
What Does the Future Hold?
The big question on everyone’s mind is, of course, what does the future hold for the JDM classic car market? Are we simply seeing a minor correction, or is this the beginning of a more significant downward trend?
It’s important to remember that markets are cyclical. What goes up often comes down, and the rapid inflation of JDM classic car prices was unlikely to be sustainable in the long term. That said, predicting the future of any market is notoriously difficult.
For enthusiasts and collectors, this potential softening of the market could present an opportunity. If prices do continue to decline, those who were previously priced out of the market might finally have a chance to purchase their dream car. However, for those who bought in at the peak, the prospect of falling prices might be concerning.
In New Zealand, we’ll be watching the market closely. The anecdotal evidence suggests that prices are beginning to soften, but only time will tell if this is a temporary blip or the start of a more significant trend.
What’s Happening in Your Local JDM Classic Market?
This brings us to a broader question: what is happening in other markets around the world? Are you seeing similar trends, with prices beginning to soften, or are JDM classics still climbing in value where you are? The JDM classic car community is global, and it will be fascinating to see how these trends play out in different regions.
At Garage Dreams, we’ll continue to keep our finger on the pulse of the market, bringing you the latest insights and updates. Whether you’re a seasoned collector or someone looking to get their first taste of JDM magic, staying informed is key to making the right decisions in this ever-evolving market.
Hello
Here in France, all brands and cars up to early 2000’s have exploded in prices
JDM or US cars, european cars etc…
Subarus are no longer affordable in particular Imprezas (WRX or Sti)
All we can do is “wait & see” if prices will move next year
Cheers
Thanks for commenting Antoine. Interesting to see that this phenomenon is playing out in Europe as well.
Are JDM cars common in France? Or if somebody has a WRX/STI is it normally one that was sold new in France with the European configuration e.g. steering wheel on left hand side.