The global luxury investment market is showing signs of stabilisation after a prolonged correction, with collectors increasingly shifting focus towards rarity, provenance and cultural significance, according to Knight Frank’s Wealth Report 2026.
The Knight Frank Luxury Investment Index (KFLII) declined marginally by 0.4% in 2025, marking a sharp improvement after three consecutive years of decline and signalling a more balanced phase for high-value collectibles. Despite the recent dip, the index has risen 38.6% over the past decade, reflecting the long-term strength of luxury assets.
Performance across segments remained mixed, with select categories rebounding strongly. Impressionist art emerged as the top performer, surging 13.6%, supported by major single-owner sales. A standout was Portrait of Elisabeth Lederer by Gustav Klimt, which fetched $236.4 million, setting a record for a modern artwork at auction.
Watches also posted gains of 5.1%, driven by robust demand for marquee brands such as Patek Philippe and Rolex. In contrast, classic cars declined 3.7%, although rare models like the Ferrari F50 continued to attract strong interest at global auctions.
The wine and spirits segment saw sharper corrections, with whisky prices falling 10.9%, while Burgundy and Champagne extended their post-pandemic slowdown. However, Italy’s Super Tuscans remained relatively resilient, registering modest gains.
In the luxury goods segment, handbags held largely steady, with growing emphasis on provenance and history. This trend was underscored by the $10.1 million sale of a personal Hermès Birkin bag owned by Jane Birkin.
The report also highlighted a structural shift in investor behaviour, with younger buyers increasingly turning to fractional ownership platforms to access high-value assets such as art, watches and cars.
“After a cycle of sharp highs and rapid correction, the market is entering a more rational and discerning phase,” said Liam Bailey, Global Head of Research at Knight Frank, noting that collectors are now prioritising quality, rarity and cultural resonance over speculative buying.
The findings suggest that while broad-based gains may remain muted in the near term, demand for rare and historically significant assets is likely to underpin the next phase of growth in the luxury investment market.
The Knight Frank Luxury Investment Index (KFLII) declined marginally by 0.4% in 2025, marking a sharp improvement after three consecutive years of decline and signalling a more balanced phase for high-value collectibles. Despite the recent dip, the index has risen 38.6% over the past decade, reflecting the long-term strength of luxury assets.
Performance across segments remained mixed, with select categories rebounding strongly. Impressionist art emerged as the top performer, surging 13.6%, supported by major single-owner sales. A standout was Portrait of Elisabeth Lederer by Gustav Klimt, which fetched $236.4 million, setting a record for a modern artwork at auction.
Watches also posted gains of 5.1%, driven by robust demand for marquee brands such as Patek Philippe and Rolex. In contrast, classic cars declined 3.7%, although rare models like the Ferrari F50 continued to attract strong interest at global auctions.
The wine and spirits segment saw sharper corrections, with whisky prices falling 10.9%, while Burgundy and Champagne extended their post-pandemic slowdown. However, Italy’s Super Tuscans remained relatively resilient, registering modest gains.
In the luxury goods segment, handbags held largely steady, with growing emphasis on provenance and history. This trend was underscored by the $10.1 million sale of a personal Hermès Birkin bag owned by Jane Birkin.
The report also highlighted a structural shift in investor behaviour, with younger buyers increasingly turning to fractional ownership platforms to access high-value assets such as art, watches and cars.
“After a cycle of sharp highs and rapid correction, the market is entering a more rational and discerning phase,” said Liam Bailey, Global Head of Research at Knight Frank, noting that collectors are now prioritising quality, rarity and cultural resonance over speculative buying.
The findings suggest that while broad-based gains may remain muted in the near term, demand for rare and historically significant assets is likely to underpin the next phase of growth in the luxury investment market.
