A tale of two classics: Watches tick up, while jewels lose their shine
The 4th edition of the Coutts Passion Index shows that, despite a turbulent 2018, collectors worldwide are still investing heavily in their passions.
02 Sep 2019
Measuring the financial value of the world’s most beautiful and aspirational assets, the index looks at categories including Fine Art, Collectibles, Precious Items, and Property. The newest findings show passion assets holding steady last year, returning 0.1% overall.
While classic watches shot up by 20%, jewellery fell by 18.3% - its largest annual fall since the index started in 2005. The two have historically shown some of the strongest growth, rising on average by 6% each year, and both have doubled in value since index inception. Nonetheless, this is a particularly unpredictable category, with heavy price fluctuation – just last year, watches fell in value by 8.1%.
The broadest category in the Index, this covers everything from coins and stamps, to cars and carpets. Typically, although some of the most volatile assets, collectibles tend to outperform the broader index. Despite a fourth year of consecutively falling returns (-3.5%), Classic Cars remain the best performing passion asset over the life time of the Coutts Passion Index. On the up, fine wine has grown in value by 2.4%, while coins have seen an increase of 1.6%. Coin collecting has only once shown a negative annual return since the index started, increasing in value by 228.8%.
At the other end of the scale, rare musical instruments and fine rugs have fallen by 7.9% and 6% respectively.
Yet to make a full recovery from the recession of 2008, fine art saw another year of falling value – this year by 0.4%. The most desired category was the Old Masters, whilst Traditional Chinese works of art fell by 4.5%. For those who are looking to buy, however, one category is on the rise. Art by women, is one of the fastest growing field for collectors, with artists such as Njideka Akunyili Crosby and Celia Paul continuing to make waves.
In 2018, traditional prime global hot-spots (including London, Paris, Los Angeles, New York, Sydney and Tokyo) saw property prices fall by 1.2% on average. Meanwhile, prime properties in emerging global hot-spots (such as Hong Kong, Moscow, Shanghai and Singapore), outperformed last year, but remain historically more volatile. Singapore proved to be a particularly lucrative location, offering returns of 6.5% on ultra-prime* properties, and 7.1% on prime** properties. Despite somewhat underwhelming returns for London (with both prime and ultra-prime properties down over 3%), the appeal of London’s trophy homes remains. Katherine O’Shea from Coutts Real Estate Investment Service noted there are still more billionaires living in London than any other city in the world, and praised the booming merger and acquisition market in London.
Commenting on the launch of the 4th edition of the Coutts Passion Index Mohammad Kamal Syed, Head of Assets Management at Coutts said:
“The index looks beyond day-to-day needs, and instead taps into the eclectic range of passions and hobbies that our clients enjoy - from Ferraris, to fine jewellery, and even floor rugs. And it’s worth remembering that the intrinsic value of a collectible item is only a small part of the joy it brings – for most, the pleasure comes from the collection itself, and if there’s financial gain off the back of it, even better. Nonetheless, collectors of watches will be most pleased this time around, as the asset ranks top. And for classic cars lovers, there’s still plenty of reason to cheer – it remains the index’s best ever performing asset”.
*Ultra-prime: A basket of primary homes owned by wealthy individuals, in 10 key global cities, representing the best-in-class in each location.
** Prime: A basket of properties representing the top 5% of the property market in 10 key global cities - excluding Ultra-Prime properties.