A couple of interesting stories came to light this month. Two stories: one has art not real estate as the leading luxury investment; the other sees apartments at the top of the investor list.
Firstly, when Knight Frank published its Luxury Investment Index (KLFII) at the end of the first half of this year, art was the leading luxury investment, and art prices had risen by 30 per cent over the 12 months to the end of June 2023.
Behind art and both coming in with only a 10 per cent rise were watches and jewellery.
Coins came next, recording growth of eight per cent, but poor old classic cars, which had come in second place last year with growth of 25 per cent, slipped to fifth spot, with growth of just five per cent.
In order after that were wine, colour diamonds, handbags, furniture (zero per cent growth) and rare whisky (negative growth).
Overall, the Index rose seven per cent in the 12 months compared with prime luxury residential prices across Australia which grew 1.7 per cent over the same period.
Knight Frank suggests there is strong link between prime residential real estate and luxury investments.
The KFLII results show that people are still willing to spend on personal luxury items, despite economic uncertainty and interest rate rises; and, let’s face it, you need space to show off luxury collectibles including garage spaces, great wine storage, a safe for watches and jewellery, and space to hang the valuable art.
A second story, for investors with their nose to the ground, has apartments emerging as a top investment proposition.
Queensland, NSW, Victoria, South Australia and the ACT all feature suburbs where apartments are likely to outperform standalone houses, according to Hotspotting’s National Top 10 Apartment Hotspot report.
Reasons why apartments are increasingly becoming the property of first choice include their faster growth in rents, superior price growth for much of the past year and a growing percentage of all new dwelling approvals.
While apartments tend to be more affordable buying, especially in the largest cities, people, in general, have embraced apartment living because they have the opportunity to be in more desirable locations with easy access to lifestyle precincts.
For investors, historically higher yields and solid demand from tenants will continue the apartment appeal.