Despite the worries for the UK economy and the global cost of living crisis, investments in luxury items have risen.
Collectors are looking beyond the economic concerns and taking advantage of designer investment opportunities.
Highly desirable Swiss watches, Birkin bags and 81-year-old whiskies are some of the best luxury items, with growing numbers of young adults purchasing luxury brands.1
Art was the top performer in the Knight Frank Luxury Investment Index, rising by 29%, followed by classic cars (up 25%), watches (up 18%), handbags (up 15%) and wine (up 10%).2
We’re looking at the best collectable investments—and how to protect them.
Luxury handbags by the likes of Hermès, Louis Vuitton or Chanel are not just a must-have accessory for celebrities and the super-rich, they’re also investments.
Just a few years ago, these wardrobe investments outperformed art, with crocodile-skin Hermès bags smashing auction records.3
The market remains popular with collectors, dealers, and luxury resellers, with the Hermès Himalaya Birkin considered the most desirable, and the Himalaya Kelly the rarest.4
In September 2022, a Hermès Himalaya Crocodile Kelly fetched €352,800 at auction in Paris.5
Find out more about designer handbags.
The art market
Art has attracted the attention of collectors as auction houses celebrate record-breaking sales.
Andy Warhol’s portrait of Marilyn Monroe, Shot Sage Blue Marilyn, sold for $195m at Christie’s in New York.6
The 1964 painting became the second most expensive piece of artwork ever sold at auction.7
That same year, in 2022, Christie’s, Sotheby’s and Phillips sold a total of £14.3 billion worth of art and other collectables.7
Sales were driven by ultra-wealthy collectors spending on museum-quality works of art and blue-chip masterpieces,2 while deaths or divorces of art-collecting billionaires also fuelled record revenues.7
Find out more about the art market.
While most cars lose value after they’re driven off the forecourt, collectable cars gain value over time.
Classic cars came second within the KFLII index, rising 25% – the strongest finish for nine years.2
Not only can you enjoy them on the road, but a vintage motor that appreciates in value would also see you cash in.
A 1955 Mercedes-Benz Uhlenhaut Coupé sold at auction for a record €135 million ($143 million) to a private collector in 2022.8
Find out more about the classic car market.
As well as wealthy motorists, cyclists are also splashing out on luxury wheels.
The UK cycling market saw a 27% rise in sales, between April and September 2020, and a 26% increase in average prices compared with the same period in 2019.9
During the past few years, luxury brands have tapped into the high-end bicycle market.
Fashion designer Stella McCartney joined forces with Cannondale to create a series of limited-edition bikes.10
And Louis Vuitton teamed up with Maison Tamboite to release a range of bicycles,11 with price tags ranging from £20,200 to £22,900.12
Find out more about the bike market.
Vintage watches can be another key investment.
With Patek Philippe creations – the “holy grail” of watches – consistently commanding more than £1 million, timepieces attract wealthy investors.13
Imports of Swiss watches to the UK increased by 31% in the first six months of 2022.1
Auction houses celebrated booming sales, with the watch market at the three big auction houses growing 33% last year – a total of £475 million.2
The 2022 highlight was a Gobbi Milano-signed Patek Philippe reference 2499, which fetched more than 60.2 million Hong Kong dollars ($7.7 million).14
In 2019, a Patek Philippe Grandmaster Chime in steel sold for $31 million, becoming the most valuable watch ever sold at auction.15
Find out more about the luxury watches market.
Whether it’s the taste, the history of the spirit or the art of the bottle, there are many reasons to enjoy collecting whisky.
However, acquiring a highly appreciating cask collection or rare bottle of Scotch can be purely a good investment.
Whisky was the best-performing collectable in a decade, with 373% growth during the past ten years.2
Some impressive sales have taken place at London auctions in recent years, including the "world's oldest whisky”.
The rare single malt whisky – an 81-year-old Macallan – was sold to a private collector for £300,000 almost triple its estimated price, in 2022.16
Find out more about the whisky market.
While whisky has an illustrious history as a time-proven asset, wine outperformed spirits in 2022.2
Statistics revealed a 10% growth over the past 12 months, compared to just 3% for whisky.2
It was a good year for investing, with wine beating coins (8% growth), jewellery (6%) and coloured diamonds (4%).2
Of course, it takes time, financial commitment, and a lot of research for wine lovers to become successful collectors.
However, fine wine is attractive because it can be a low-stress and tax-free investment.17
Find out more about the wine market.
Investing in jewellery can elevate your outfit and your bank balance.
Unlike wine, where you can’t crack open your investment, you can enjoy wearing your jewellery without compromising its worth.
Cartier remains a favourite among jewellery collectors and royalty.18 As with other world-famous brands, necklaces, rings, bracelets, brooches, and diamonds can be more valuable in the future.
An 11.15-carat Williamson Pink Star diamond was sold for 453 million Hong Kong dollars (£52 million) to an undisclosed buyer at auction by Sotheby’s Hong Kong in 2022.19
Find out more about the jewellery market.
Protect your collections
If you've invested in a luxury item or have a collection in your household, we understand how much it will mean to you. And with the cost and value of luxury items on the rise, our Private Clients team can help ensure you are protected.
Our team of experts goes the extra mile to not only ensure your collectables are insured correctly, but also to take the time to advise on the risk management of these items, from valuations to security and protection. We explain your protection so that you can be confident in your cover and make sure it works for your lifestyle.
Contact the Marsh Private Clients team for help and advice about insuring your precious collection today.