Wines have replaced Scotch whisky and Hermes handbags as the best performing luxury investment during the pandemic, according to Knight Frank.
The average price of investment grade wines rose 13 per cent in the 12 months to June, while the average price of the coveted handbag declined by 3 per cent in the period, according to a report by the London-based consultancy that primarily covers real estate.
Wines were followed by luxury watches and cars, which recorded gains of 5 per cent and 4 per cent, respectively.
“Two assets that have been at the helm of the Knight Frank Luxury Investment Index in recent years – rare bottles of Scotch and Hermes handbags – have relinquished their places at the top of the index, recording negative 12-month growth,” said Andrew Shirley, editor of Luxury Investment Index at Knight Frank.
Prices of wine, however, have risen by 119 per cent over a 10-year period, with vintages such as 1996 and 2000 Bordeauxs attracting interest from collectors.
“Wine is doing really well, not going crazy but growing nicely. There are no signs of over exuberance,” said Nick Martin of Wine Owners, who compiles the data for Knight Frank.
In Hong Kong, the same trend has been observed, according to Mariana Lam, founder and managing director of WineWorld Xplorer, a multimarket wine trading and asset management platform.
“In general, investment wines have been very lucrative and more liquid in the past six months,” Lam said, noting that a case of the prized Domaine de la Romanee-Conti wines from France sold for at least HK$400,000 (US$51,380) in the city.
A huge demand and limited supply of the asset is likely to boost prices in the coming months, she added.
Meanwhile, the dip in prices of rare Scotch whiskies was likely to be temporary, Knight Frank said.
Rolex sports watches remain a popular collector’s item, but “the rarest and most unusually shaped Cartier models from the 1950s to 1970s” have recently seen “a big upswing in prices”, according to the report.
Hermes handbags are among the most coveted luxury items in the world, with prices ranging from US$9,000 to US$500,000 apiece. Viewed as the ultimate luxury among women, there are several reasons the handbags, particularly the iconic Birkin bags, are so expensive. The purses are viewed as pieces of artwork, lifting their sale and re-sale value. The limited number of bags in circulation also lends it an air of exclusivity, as only a handful of lucky ones get to own the arm candy.
In 2020, despite the logistical challenges owing to various restrictions imposed across the globe to stem the spread of the coronavirus pandemic, the average prices of the Hermes handbag rose 17 per cent, according to a previous report by Knight Frank.
“Handbags in general are still doing well,” Shirley said. “The rapid price increase of Hermes bags meant people have started looking at other brands such as Chanel. In general, lockdown has given people more time to research these asset classes and add to their collections.”Internet Explorer Channel Network