Which luxury segment had the best return last year? Hint: It’s not designer bags

Collectibles

Knight Frank released its luxury investment index for 2023. The best-performing sector is up 11% year-on-year and increased 103% over the last decade.

Whisky, wine and watches experienced exceptionally strong growth over the last decade compared to their luxury sector counterparts.

And yet, the luxury segment with the highest 10-year growth – whisky – is also the sector that declined the most in 2023.

Investors in the ‘water of life,’ as whisky is colloquially known, experienced an average 9% downturn on their investment over the past year. On a 10-year basis, however, rare bottles of whisky have had the highest gains (280%).

Other big movers over the last decade include wine (up 146%) and watches (up 138%). While no category declined over a 10-year basis, the luxury asset class with the lowest growth since 2014 is jewellery, closely followed by furniture.

Growth in Luxury 2014 – 2024
Luxury Asset CategoryPercentage increase
Whisky280%
Wine146%
Watches138%
Art105%
Cars82%
Handbags67%
Coins56%
Furniture40%
Jewellery37%
Coloured diamonds8%
Source: Knight Frank luxury investment index 2014- 2024

Cars were a mixed bag in 2023. While automobiles declined 6% overall, BMW and Lamborghini saw gains. Classic car expert Dietrich Hatlapa says collectors may have invested in equities rather than classic cars over the last year.

“The value of the HAGI top index was up 22% in 2022, so a retreat of 6% isn’t all that bad,” says Hatlapa.

“The strong performance of other investment classes such as equities may have dampened collectors’ appetites – it’s a very small market so it only takes a minor change in portfolio allocations to have an effect. We have seen some marques like BMW (+9%) and Lamborghini (+18%), which appeal to a younger breed of collector, buck the trend in 2023.”

On a 10-year basis, luxury cars have performed well, gaining 82%.

Luxury cars have increased in value by 82% over the last decade. Year over year, however, luxury cars are down 6%. Image: Getty

The biggest winner over the last 12 months, is a category that is not found on the roads or in garages, but in galleries and high-end homes. Art had the highest percentage growth of any luxury sector in 2023, increasing 11% on average. Jewellery and watches round out the top 3.


Growth in Luxury 2023 – 2024
Luxury Asset CategoryChange year over year %
Whisky-9%
Cars-6%
Handbags-4%
Furniture-2%
Wine1%
Coloured diamonds2%
Coins4%
Watches5%
Jewellery8%
Art11%
Source: Knight Frank luxury investment index 2023

Andrew Shirley is the editor of the Knight Frank luxury investment index. He says despite the decline in average prices of some categories over the last year, 2023 was also the year records in luxury investment were broken.

“The priciest bottle of Scottish whisky, the most expensive Ferrari 250 GTO, the costliest blue diamond, even the dearest sword – in 2023, the major auction houses achieved a string of record-breaking sales,” Shirley says.

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