A new report published recently notes that with values soaring 25 percent over the past 12 months, fine wine is now the best-performing collectible of the world’s wealthy collectors.
Wine has replaced classic cars as the top collectible, found the Knight Frank Luxury Investment Index, which tracks the price growth in the major categories of collectibles. Collectible wine prices surged 25 percent over the past year and are up 61 percent over the past five years thanks to strength in Bordeaux, Burgundy and northern Italian wines.
After the financial crisis, Chinese wine buying exploded and then cooled and this new jump follows that boom and bust in fine wines. Now buying has picked up again because of the strengthening of the Chinese economy and because of the fact that prices have stabilized. By snapping up more than 100 chateaux in France’s Bordeaux region, wealthy Chinese have also developed a taste for vineyards, in addition to scooping up the fine wines But strength from strong economies in the U.S., Europe and the rest of Asia strength from strong economies in the U.S., Europe and the rest of Asia is also driving up the wine increasing prices. And Chinese buyers are becoming more expert buyers.
“After the crisis, the Chinese buyers were buying high-value wines not because they liked them, but because they perceived those wines to be the ones to buy,” said Andrew Shirley, who compiled the report for Knight Frank. “We saw that bubble pop. Now the Chinese wine buyers are more connoisseurs.”
The total sales were up 22 percent compared to 2015 in a Sotheby’s led the global wine auction market that was conducted last year. a 10-bottle lot of 1945 Chateau Mouton Rothschild went for $343,000 – way above its $120,000 estimate and its sale of wines from the cellar of William Koch fetched $22 million.
Classic cars are taking a spill at the same time. According to Knight Frank, classic car prices grew only 2 percent over the past 12 months after dominating the collectible list for years, with hair-raising price increases. They fell to sixth place on the ranking of collectibles.
“I think cars are in for a period of flatter growth,” Shirley said.
Reporting a growth of 7 percent year on year, art ranked second after wine. But art could end the year at the top spot given that some important masterpieces expected to come up for sale in the fall and the recent strength of the market.
“Art buyers have become more s elective,” Shirley said. “But I wouldn’t be surprised to see art end the year on top.”
(Adapted from CNBC)