How Luxury Investments Differ Worldwide

Luxury investments differ in different countries depending on factors like demography and the market for these goods. The United States is considered to be one of the largest markets for the demand of luxury goods. Even during the pandemic, the market has not been affected in many parts of the country. Thus, luxury investments also have fluctuated. Luxury items include art, diamonds, luxury cars and supercars, handbags, ancollectibles.

When the pandemic struck in 2020, the market for a variety of goods suffered a considerable slack. The losses even prevailed for months until the world began to teeter back to normality again. Even now, some areas have not entirely recovered from the blow, and the market economy is still in a fragile state. The market for some of the luxury goods, however, has well thrived and shown promising growth.

The luxury investments in handbags have increased in a year while colored diamonds have met with slack. Luxury investments could vary widely, but the following items are the most common purchases among the buyers.

Luxury Cars

The pandemic might have been brutal on many sales markets, but the luxury car segment has been doing good. People worldwide have been feeling liberated to travel in their cars as lockdowns are being lifted.

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In the case of wealthy folks investing in classic cars’ purchases, this factor is even more pressing, and the largest investors for luxury cars in the world are from North America. The largest sale of a luxury car last year is believed to be that of the 1932 Bugatti Type 55 Super Sport Roadster, which was sold for $7.1 million. The second in line was the 1971 Lamborghini Miura P400 SV Speciale which made a sale of $4.3 million.

Social events like car auctions might have been canceled or decreased over time because of mandatory social distancing protocols. However, one-on-one and peer-to-peer activity have increased impressively, and the sellers do not complain about the new process.

Colored Diamonds

The market for colored diamonds has not been doing as well as it used to before the pandemic. But due to the reduction in demand and price, the sale of yellow diamonds to end clients has increased.

Amid the COVID-19 crisis, and the auction prices for red and blue diamonds seem to have gone down. This may also be a result of their relatively inferior quality as compared to the others. And as it is shared among luxury investors, they do not prefer going for the second-best item.

Handbags and Luxury Watches

Handbags and expensive watches are some of the most well thriving luxury items during the 2020 pandemic. China is currently the largest investor for luxury watches. This investment activity specifically for buying Swiss watches increased from the first quarter on 2020 and went till the third quarter.

The most expensive handbag was sold at an auction last year, the Hermès Himalaya Niloticus Crocodile Retourné Kelly 25, went for about $437,330. This luxury investment will play an essential role in reaffirming Hermes’ position as a leading luxury handbag seller worldwide.

Expensive Artwork

The pandemic has adversely affected the sales of exquisite artwork on a global level. Reports indicate that the sales at art galleries might have descended by about 36 percent from what it was in 2019.

But in renowned galleries like Christie’s, Phillip’s, and Sotheby’s, the sales have reportedly increased. Online auctions are also met with good fortune because offline auctions are now becoming less and less feasible. Online auctions could have generated about $4 million more since the last year than they did the year before.

Expensive And Exquisite Liquor

With extended hours to be spent indoors to avoid the spread of the virus, the sale of liquor has plummeted like nothing else. Especially amongst billionaires and millionaires, the sale of classic wine and whiskey has remained stable.

Wine is considered to be a status quo for folks with a refined taste. There is a rising demand for the fine wine secondary market that helped in wine sales. In 2019, the sales of wine grew by 1 percent. One of the best-selling wines is the Burgundies, and there is a high demand for Northern Italian wines and champagne. The increase in demand is considered to be around 8 percent.

Despite the slack in the wine sales in 2019, the Knight Frank wealth report confirmed that wine brands had made considerable progress in the last decade of about 120 percent. In the case of whiskey, Rare Whisky 101 has experienced a slack recently, but overall the sales are still quite reasonable.

Before the pandemic toyed with the global economy, the market for luxury investments was still very different concerning various world regions. Presently, a new wave of variety shapes the market as the world is accommodating itself to the new norms.

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Sources:  CEO, Knight Frank, Visual Capitalist.

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