From Handbags to Classic Cars—the Value of Collectibles Is up 7% Annually
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Novice collectors should focus their investing efforts on what brings them happiness amid wider economic uncertainty and unpredictable returns, according to Knight Frank’s Luxury Investment Index, released Tuesday.
The index—which tracks 10 luxury collectibles: art, watches, jewellery, coins, wine, classic cars, coloured diamonds, handbags, furniture, and rare whisky—found that as a whole, the value of these collectibles rose 7% in the 12 months to the end of June.
While that outpaces the returns on some other assets, including prime property in central London (down 1% over the same time), the FTSE 100 Index (up by 5%), and gold (up 1%), it was the weakest annual performance for collectibles since the second quarter of 2021, Knight Frank said.
“Economic uncertainty and higher interest rates will cast a long shadow on luxury collectibles,” said Knight Frank’s Andrew Shirley, editor of the index. “Novice collectors should focus on what brings them joy, perhaps that’s more important now that value appreciation is far from guaranteed in these asset classes.”
Art topped the index by a long shot, growing in value by 30% in the year through the end of June, according to Art Market Research’s (AMR) All Art index, which uses data from auction sales worldwide.
However, those gains may have already peaked.
“The auction season’s spring sales are the first measure of market confidence and recent results suggest growth is already starting to slow,” AMR’s Sebastien Duthy said.
Following art, watches (10%), and jewellery (10%) rounded out the top-three best-performing collectibles of the past year.
Rare bottles of whisky were the only asset in the index to see values drop in the short term—down 4%—but collectible tipples ranked as the strongest 10-year performer, with prices rising 322% over the last decade.
“Bottles of rare whisky have had a far more sedate time from a performance perspective over the past three years,” industry consultant Andy Simpson, of Rare Whisky 101, said in the report. “Higher value (more than £5,000 (US$6,370)) bottles have re-traced recently due to a myriad of geo-political, social, and economic reasons.”
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The federal budget has rattled property investors. But the biggest mistake isn’t the tax changes, it’s the conclusion many are drawing from them.
2 min
The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”
Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
The budget has changed the settings. It has not changed the fundamentals.
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