Knight Frank's Luxury Investment Index for 2023 reveals what the rich and famous have been buying and selling, and whether their investments are going up or down.
The latest Knight Frank Luxury Investment Index (KFLII), released last week, makes for interesting reading, with art the main headline. Of the 10 most popular ‘purchases of passion’ — jewellery, watches, handbags, cars, whisky and so on, whatever floats your boat — it is art that has increased in value the most in the past 12 months, up 11% , the only one to hit double digits, although all the gains came in the first half of the year. Over 10 years, art’s price increase is 105%. This year, jewellery is up 8%, followed by watches at 5%.
Cars, on the other hand, are down in value by 6%, but still 82% up on 10 years ago. Whisky is down 9%, yet, with a staggering increase of 280% over the decade, all is clearly not lost. Andy Simpson of Simpson Reserved comments: ‘In my opinion, some bottles that lost significant value in 2023 will return through the next two years as they are simply so scarce and, right now at least, so under valued.’
‘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. It sounds like a bumper year for luxury investments, however the KFLII reveals a less positive picture,’ comments Andrew Shirley, KFLII editor. ‘KFLII edged into negative year-end territory in 2023, albeit by a fraction of a percent, as several stalwart members of the index dropped into the red or showed minimal gains. However, it’s not all doom and gloom, with some of the losses down to the froth coming off markets.’
As second-home locations go, few places are as expensive as Verbier in the Swiss Alps. Credit: Getty Images
Meanwhile, the wider Knight Frank Wealth Report reveals that the number of UHNWIs globally increased by 4.2% in 2023, reversing the decline of 2022, and luxury residential markets proved resilient despite interest rate hikes. Manila in the Philippines saw the largest increase in the Prime International Residential Index, rising 26.3% compared to the previous year. Dubai (last year’s leader), the Bahamas, the Algarve and Cape Town rounded out the top five, all seeing double digit growth.
When it comes to the smallest amount of space that $1 million will get you, it will likely come as a shock to no-one that Monaco and Hong Kong are leading the way, offering 172 and 236sq ft respectively. London is fourth on the list, with $1 million getting you 355sq ft of space. Those looking to acquire second homes in the ski resorts of Aspen or Verbier might be encouraged to shop elsewhere, with $1 million fetching 215sq ft and 300sq ft of space.
Additional reporting by James Fisher
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