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Comparing Luxury Investment Around the World

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Comparing Luxury Investment Around the World

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Comparing Luxury Investment Around the World

Do you enjoy the finer things in life? For many of the world’s wealthy individuals, acquiring luxury goods such as art, fine wine, and watches is a passion.

Unlike traditional investments in financial assets, luxury goods can be difficult to value if one does not have an appreciation for their form. A rare painting, for example, does not generate cash flows, meaning its value is truly in the eye of the beholder.

To gain some insight into the market for luxury goods, this infographic takes data from Knight Frank’s 2021 Wealth Report to compare the preferences of nine global regions.

Global Tastes in Luxury Goods

To rank the most popular luxury investments in 2020, Knight Frank surveyed over 600 private bankers, wealth advisors, and family offices. The following table summarizes their findings, as well as each category’s growth according to the Knight Frank Luxury Investment Index.

Global Average RankingCategory10-year growth in asset values (%)
1Art71%
2Classic cars193%
3Watches89%
4Wine127%
5Jewelry67%
6Rare whiskey478%
7Furniture22%
8Colored diamonds39%
9Coins72%
10Handbags108%

Art was unmistakably the top category for 2020, ranking first in every geographic region except Africa and Asia, where it placed second instead. The global market for artwork was estimated to be worth $64 billion in 2019, and is often facilitated through auction houses such as Sotheby’s.

In terms of asset appreciation, rare whiskeys have climbed the most in value over the past 10 years. Connoisseurs of this spirit will be familiar with distilleries like The Macallan, whose rare bottles can sell for more than a million dollars.

Comparing Luxury Investment Between North America and Asia

Below, we’ve compared the rankings of Asia and North America to get a better idea of how preferences can vary.

The biggest differences here are watches, which ranked first in Asia but fourth in North America, and classic cars, which ranked second in North America but fifth in Asia. The remaining eight categories took similar spots across the two regions.

RankAsia PopularityNorth America Popularity
1WatchesArt
2ArtClassic cars
3JewelryWine
4WineWatches
5Classic carsJewelry
6Rare whiskeyRare whiskey
7HandbagsFurniture
8FurnitureHandbags
9Colored diamondsCoins (tied for 8th place)
10CoinsColored diamonds

Asia’s stronger preference for watches was likely driven by Chinese consumers, who are now the biggest buyers of luxury watches globally. Demand throughout the COVID-19 pandemic proved resilient, with exports of Swiss watches to China increasing by 17.1% between January and November 2020.

Classic cars, on the other hand, may be more popular in North America due to the region’s longer automotive history. Two of America’s most iconic automakers, Ford and General Motors, have both been around for over a century!

The Biggest Sales of 2020

Here were some of the most extravagant and noteworthy luxury sales from 2020.

Art

Francis Bacon’s 1981 Triptych Inspired by the Oresteia of Aeschylus was sold by Sotheby’s for $84.6 million in June 2020. A triptych is an artwork that is divided into three sections but displayed as a single piece.

Other paintings by Francis Bacon have sold for even larger amounts. In 2013, Three Studies of Lucian Freud was sold by Christie’s auction house for $142 million.

Classic Cars

A 1932 Bugatti Type 55 Super Sport Roadster sold for $7.1 million in March 2020, making it one of the biggest classic car sales of the year.

Founded in 1909, Bugatti has produced some of the world’s most sought-after cars. The French brand was acquired by the Volkswagen Group in 1998, and since then, has released numerous special edition cars with price tags reaching well into the millions.

Handbags

An Hermès Himalaya Niloticus Crocodile Retourné Kelly 25 sold for $437,330 in November 2020, becoming the most expensive handbag ever sold at an auction. Founded in 1837, Hermès is commonly regarded as one of the world’s most prestigious makers of handbags.

COVID-19 Dampens Luxury Investment

When compared to 2019, total sales for Sotheby’s declined 16% in 2020, while Christie’s, another leading auction house, reported a 25% decline. Despite these decreases, executives remain optimistic.

“The art and luxury markets have proven to be incredibly resilient, and demand for quality across categories is unabated.”
– Charles Stewart, CEO, Sotheby’s

The industry has been largely successful in transitioning to online operations, with Sotheby’s reporting that 70% of its auctions in 2020 were held online, up from 30% in the previous year.

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Misc

10 Travel Destinations for Post-Pandemic Life

Excited to get back to travelling the world? This infographic highlights the 10 most popular tourist destinations.

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10 Travel Destinations for Post-Pandemic Life

On March 11, 2020, the World Health Organization formally classified the COVID-19 outbreak as a pandemic. The resulting travel bans decimated the tourism industry, and international air travel initially fell by as much as 98%.

Almost two years later, travel is finally back on the table, though there are many restrictions to consider. Regardless, a survey conducted in September 2021 found that, as things revert to normalcy, 82% of Americans are looking forward to international travel more than anything else.

To give inspiration for your next vacation (whenever that may be), this infographic lists the 10 most visited countries in 2019, as well as three of their top attractions according to Google Maps.

Bon Voyage

Here were the 10 most popular travel destinations in 2019, measured by their number of international arrivals.

CountryNumber of international arrivals in 2019 (millions)
🇫🇷 France*90.0
🇪🇸 Spain83.5
🇺🇸 U.S.79.3
🇨🇳 China65.7
🇮🇹 Italy64.5
🇹🇷 Turkey51.2
🇲🇽 Mexico45.0
🇹🇭 Thailand39.8
🇩🇪 Germany39.6
🇬🇧 United Kingdom39.4

*Estimate | Source: World Bank

France was the most popular travel destination by a significant margin, and it’s easy to see why. The country is home to many of the world’s most renowned sights, including the Arc de Triomphe and Louvre Museum.

The Arc de Triomphe was built in the early 1800s, and honors those who died in the French Revolutionary and Napoleonic Wars. In 1944, Allied soldiers marched through the monument after Paris was liberated from the Nazis.

The Louvre Museum, on the other hand, is often recognized by its giant glass pyramid. The museum houses over 480,000 works of art, including Leonardo da Vinci’s Mona Lisa.

Art isn’t the only thing that France has to offer. The country has a reputation for culinary excellence, and is home to 632 Michelin-starred restaurants, the most out of any country. Japan comes in at second, with 413.

While You’re There…

After seeing the sights in Paris, you may want to consider a visit to Spain. The country is the southern neighbor of France and is known for its beautiful villages and beaches.

One of its most impressive sights is the Sagrada Familia, a massive 440,000 square feet church which began construction in 1882, and is still being worked on today (139 years in the making). The video below shows the structure’s striking evolution.

At a height of 172 meters, the Sagrada Familia is approximately 52 stories tall.

Another popular spot is Ibiza, an island off the coast of Spain that is famous for its robust nightlife scene. The island is frequently mentioned in pop culture—Netflix released an adventure/romance movie titled Ibiza in 2018, and the remix of Mike Posner’s song I Took a Pill in Ibiza has over 1.4 billion views on YouTube.

Beaches Galore

If you’re looking for something outside of Europe, consider Mexico or Thailand, which are the 7th and 8th most popular travel destinations. Both offer hot weather and an abundance of white sand beaches.

If you need even more convincing, check out these links:

Expect Turbulence

Under normal circumstances, hundreds of billions of dollars are spent each year by international tourists. According to the World Travel & Tourism Council (WTCC), this spending accounted for an impressive 10.4% of global GDP in 2019.

Travel restrictions introduced in 2020 dealt a serious blow to the industry, reducing its share of global GDP to 5.5%, and wiping out an estimated 62 million jobs. While the WTCC believes these jobs could return by 2022, the emerging Omicron variant has already prompted many countries to tighten restrictions once again.

To avoid headaches in the future, make sure you fully understand the rules and restrictions of where you’re heading.

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Misc

Which Values Children Should Be Encouraged to Learn, By Country

Which qualities do people think are most important for children to learn? The answer differs from country to country.

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Qualities Children Should Learn

Many of the values we prioritize as adults were instilled in us during our childhood days.

They’re called our formative years for a reason—from when we’re born up until we’re about eight years old, our brains are easily molded and remain highly sensitive to external influences and environments. But depending on where you grew up, you may have been exposed to different values during your childhood compared to someone from another place.

These visualizations by Anders Sundell illustrate the most important values people think children should learn at home, across more than 80 different countries.

Methodology

Sundell used data from the World Values Survey, an international survey that interviews hundreds of thousands of participants from across the globe. Respondents were asked to pick up to five qualities they believe are the most desirable for children to have:

  • Good manners
  • Independence
  • Hard work
  • Feeling of responsibility
  • Imagination
  • Tolerance and respect for other people
  • Thrift, saving money
  • Determination and perseverance
  • Religious faith
  • Unselfishness
  • Obedience

Sundell took the survey data and calculated the proportion of people in each country that selected each quality. From there, he took the top qualities and created three separate plot graphs to show the contrast between them.

Let’s look at the importance that countries placed on different values, including (1) independence and obedience, (2) unselfishness and religious faith, and (3) hard work and imagination.

1. Independence vs Obedience

Nordic countries value independence greatly, and find obedience to be a less important quality to instill in children.

Independence_vs_Obedience

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Other available data also supports that adults in Nordic countries value independence. According to Eurostat, the most common age to leave home in Sweden is between 17 and 18—nearly a decade sooner than the average age across the EU (26 years old).

Denmark’s average age to leave home is also below the European average, at 21 years old.

On the other end of the spectrum, countries like Iraq and Egypt believe obedience is much more important for children to learn.

2. Unselfishness vs Religious Faith

Bangladesh, Egypt, and Jordan all place a strong emphasis on faith, and fall on the far right of this graph.

unselfishness_versus_faith

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Islam is a strong influence in all three of these countries. In Bangladesh and Jordan, it’s the official state religion. And while Egypt is a secular country, a majority of citizens identify as Muslim—about 90% of the population.

Interestingly, places like the U.S. and Hong Kong fall right in the between, placing relatively equal importance on religion and unselfishness.

3. Hard Work vs Imagination

Left-leaning Nordic countries like Sweden, Norway, Denmark, and Finland think imagination is more important for children to learn than hard work.

Hardwork_versus_imagination

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Interestingly, Japan also scored high for imagination, seeing it was a more important value to teach children than hard work. This is despite the fact that the country has an international reputation for being a hardworking country, where even taking an extended vacation can be frowned upon. Then again, Japan has a reputation for producing wildly creative works of art that are popular internationally (anime, for instance).

As expected, countries and cultures contain multitudes, and can often seem paradoxical and complex to those who try to codify them.

What qualities do you think are most important, and what countries surprised you with their placements?

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