Inflation hits luxury goods: watches and jewelry become more expensive by more than 10%

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Inflation hits luxury goods: watches and jewelry become more expensive by more than 10%

She Luxury Investment Index by Knight Frank (KFLI), an index that measures investment behavior in non-real estate luxury goods, also known as Passionate Goods through a weighted sample of 10 types of properties, registered an increase of 7% until the end of June 2023, compared to a year before.

In part, this is due to a record cumulative revaluation in the art market, 30%. This data varies, among others, with housing prices CHIEF in London, which fell 1% over the same period; the benchmark share index of the London Stock Exchange, which rose 5%; and gold, whose value increased by only 1%.

The most established assets are not immune to economic uncertainty and rising interest rates. a situation indicated by the fact that this is the weakest annual performance of the Knight Frank luxury index since the second quarter of 2021.

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In addition, the results of the art auction suggest that the growth of this asset class has increased. Spring and summer auction season sales are the first measure of confidence in the market and the results suggest that growth is starting to slow.

In relation to the components of the index due to revaluation, luxury watches and jewelry, with an increase of 10% each, were the other two assets that grew the most; followed by ancient coins, which occupied the fourth place (+8%).

On the other hand, it promotes the slowdown in the luxury wine market (5%) and classic cars (5%), both in sixth and seventh place, which renewed their growth. Diamonds ranked eighth in the index, up 4% on the year. Bags (1%), Furniture (0%) and Whiskey (-4%) complete the ranking. Whisky, which has had the best performance in 10 years so far, is the only asset that currently has a negative annual return.

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Real estate and art merge

Investors who come to Spain seek to acquire houses in classic buildings in the city center that, in addition to high ceilings and moldings, have all the technological facilities. “In the luxury market it’s not about square meters, it’s cubic meters“, confirmed Ana White, Knight Frank’s Director of Residential Client Services.

“This buyer likes to receive family and friends at home and for them art creates conversations, encourages the exchange of ideas and each work becomes a starting point to share experiences, views and emotion. Art has the power to transform our homes. More than just a decoration, it is an expression of our identity and a constant source of inspiration,” he added.

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