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Fine wine prices outstrip diamonds, fine art and classic cars – research

Fine wine price growth ‘powers ahead’ of luxury sectors like classic cars, jewellery and fine art, according to Knight Frank’s newly published Luxury Investment Index 2017.

Fine wine prices rose on average by 25% in the 12 months to the end of June this year, said Knight Frank in its Luxury Investment Index (KFLII) for 2017, released this autumn.

‘No other asset class achieved double-digit growth across the past twelve months,’ said Andrew Shirley, Knight Frank’s wealth report editor.

Its report is the latest indicator of a return to form for the global fine wine market in the past two years, although secondary market trading platforms reported a slower pace of growth than KFLII.

Knight Frank measured price growth in 10 luxury investment sectors. Wine was the highest year-on-year performer, ahead of fine art, classic cars, jewellery, antique furniture and diamonds.

‘It’s a time of change’ said Shirley, pointing to a shift in investment opportunities.

The group also calculated that fine wine prices have risen by 61% over the past five years and by 231% versus a decade ago, in both instances coming second only to classic cars.


wine investment

The index tracks the steady rise of wine price growth vs. other luxury assets. Credit: knightfrank.co.uk

Wine Owners provided Knight Frank’s fine wine data.

Its founder, Nick Martin, told Decanter.com, ‘Médoc Classified Growths have risen on average by 40-45% in the last three years. That’s helped buyers of 2009 and 2010 vintage break back into the black, bringing more sellers back into the market and driving market liquidity.’

He added, ‘Blue chip Burgundy remains very strong, up 31% last year and 12% year to date. Scarcity paired with global demand for sought-after producers has made top Burgundy a consistently good bet, with 10 year gains of 411%.’

Other experts were more cautious, but still upbeat about the fine wine market’s health as 2017 draws to a close.

BI LiveTrade Index reported fine wine price growth of 14% year-on-year to the end of June 2017, although this decreases to 2.5% growth when measured January to September 2017.

‘What we take from this above all else is that the market remains heavily influenced by Asian and European trade, and this is overwhelmingly a consumption or collection demand,’ BI’s head of marketing, Giles Cooper, told Decanter.com.

‘Almost 55% of all our LiveTrade sales, driven mainly by top Bordeaux and Champagne, were to Asia-based clients.’

Nick Martin agreed that Asian buyers were stepping in, but added that ‘an increasing proportion of their purchases are being stored in the UK and Europe, ensuring better provenance and future resale’.

Liv-Ex pointed out the favourable timing of the Knight Frank report.

Using the Live-ex Fine Wine 1000 on its own trading platform, it saw steeper price growth in the 12 months to June 2017 versus the year to the end of September, which saw a 12.5% price increase versus the previous year. 

Written by Laura Seal for Decanter.com

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