Classic cars increased in value by 40 per cent during 2014, and have increased in value nearly four fold, since 2005, according to the latest edition of the Coutts Index.
In its second year, the report shows that while passion investments have increased just 0.8 per cent during 2014, this masks the diversity of returns of the various underlying categories which have increased overall by 80 per cent (local currency terms) since 2005.
The Index aims to provide the global benchmark for monitoring the performance of passion assets.
Developed in conjunction with Fathom Consulting, the Coutts Index captures the price return in local currency (net of the holding costs) of 14 passion assets across two broad categories: trophy property and alternative investments. Alternative investments can be further broken down into fine art, collectibles and precious items. The Coutts Index also incorporates a real estate component supplied by Savills World Research and fine art prices from Mei Moses.
Collectibles – coins have appreciated every year, up 176 per cent since 2005. By contrast, Fine Wine was the only Collectable to see prices fall in 2014, down more than 9 per cent in the third consecutive year of contraction after rapid price growth in 2006-07.
Fine Art – of all the Fine Art categories, Traditional Chinese Art has seen the greatest overall price growth since 2005, more than doubling over the period. However, this was the only art category to fall in 2014 with prices contracting 13 per cent.
Precious Items – 2014 was not a strong year for Jewellery or Watches with price growth for the former dropping from more than 14 per cent in 2013 to under 2 per cent in 2014. The average price of watches contracted by more than 17 per cent last year, undoing some of the progress made since the recession.
Property – despite some of the headlines regarding London’s super-prime real estate market, 2014 was actually an unremarkable year for Trophy Properties – divided into residential properties (luxury properties in ten prime global city locations) and leisure properties (in the world’s most desirable leisure destinations), with the former virtually unchanged and the latter falling by 2 per cent. This is against a backdrop of double digit increases before the 2008 financial crisis.
Mohammad Kamal Syed, Head of Financial Advice and Investment Solutions at Coutts, says: “At a time of paltry interest rates, we continue to see lots of interest from the wealthy in finding somewhere worthwhile and out of the ordinary to put their money. Passion assets maintain their appeal, indeed the majority of passion assets we’ve tracked have risen over the past 12 months. Aside from the returns, these assets can bring a sense of excitement and the thrill of acquisition is a clear motivation for lots of collectors.”