31.10.2023
The Knight Frank Luxury Investments Report is a quarterly publication by the prestigious global real estate consultancy of the same name. It offers in-depth insights into high-end investments like fine art, rare wines, classic cars, and luxury watches. The report provides data-driven analysis, expert opinions, and market forecasts aimed to help investors and collectors make informed decisions about luxury assets. Here you can find our by-category summary of the report for Q2 of 2023.
In the first part of our series on the Knight Frank Luxury Report, we already looked at the potential of various asset classes. From whisky to luxury cars and wines to coloured diamonds–dive into the second part with exciting market insights.
Rare whisky can be a truly lucrative investment as evidenced by its +322% rise over the last decade. Nevertheless, the index has now declined by -4%, which can be attributed to economic backgrounds, among other things. However, most indexes, including, the Knight Frank index, track the performance of very rare bottles and are not necessarily an accurate representation of the wider market. According to the Rare Whisky 101 Apex 1000 Index, the latter for the broad market has fallen by -1.5%. Basically, the experts emphasise that recognised brands and especially rare bottlings will always be in demand in the long term, even if the market situation looks different in the short term.
The wine market has experienced a bit of a slowdown in the last 12 months. The success story of the last decade, Burgundy, peaked in early autumn 2022 with a +376% price increase and has since declined by -9%. Another drop can be observed in the performance of champagne, which depreciated by -1%. According to Nick Martin of Wine Owners, this is a result of the fact that “Champagne is a high-volume market, with certain prestige brands’ production running into the several million of bottles per vintage release. Prices of some of those prestige cuvées have been testing price elasticity of demand and seen sales stagnate as a result.”
Nonetheless, average prices for wines out of Italy and the US have increased by +6% and +2% respectively, representing a good investment avenue. Some markets such as South Africa (+11%) and Australia (+8%) have seen particularly strong growth this year, supporting the performance of the index.
Wine behaves similarly to whisky and shines above all with a stable development over the long term. The performance over the last 10 years is an impressive +149%, making wine the second strongest asset class in the KFLII 2023 Q2.
According to Dietrich Hatlapa of HAGI, the performance of classic cars has been mixed due to macroeconomic factors like rising interest rates and inflation. The average value of cars by other respected brands like Lamborghini and BMW models has still increased (by +9% each). Demonstrating, that classic cars can still be a great investment. Ferrari has seen the biggest drop with -15%, Merceds-Benz had a decrease of -10% and Porshe -5%.
Dream big: Top models inspire with price increase
At the same time, an enormous price increase could be observed for some ultra-rare models last year. The list is dominated by the renowned luxury brands Porsche and Ferrari. For example, the Porsche 911 Carrera RS 2.7 rose by a whole +87% between May 2022 and 2023. Ferrari is in no way inferior: The Ferrari 288 GTO impresses with an increase of +67%.
The results suggest that rare and sought-after luxury vehicles in particular can represent a high-yield investment even in weak market situations.
Sebastian Duthy from AMR noted that collectors from around the world are “drawn to vintage jewels and exceptional coloured gemstones and diamonds as they re-invigorated recent summer auction sales.” This can be seen in the recent performance of fancy-coloured diamonds. Although “pink diamonds have seen the strongest price growth over the long term, yellow diamonds have been rising in popularity over the past 12 months” and have now appreciated by 6%. Pink diamonds still come strong at 3% and blue diamonds have seen a value increase of 2%.
Buy fractions of unique assets in drop or trading.
Screaming Eagle 2x Magnum (2017)
Porsche 911 Coupé 2.7 (1976)
