High-end art and car prices drop as the ultra-rich tighten belts

“It was, however, the weakest annual performance by KFLII since the second quarter of calendar 2021, proving that even tangible assets are not immune to market uncertainty,” Ciesielski said.

It is the slowdown in the wine and classic car markets, both in sixth and seventh place respectively with five per cent growth over the past 12 months, that have tempered overall growth, as these asset classes previously have had double-digit rises that have often underpinned the index’s performance.

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The report found that Italian wine prices jumped by six per cent as demand increased. The prices of champagne and burgundy both fell by one per cent and nine per cent respectively. Ferrari was the most popular car brand followed by Porsche and Mercedes-Benz, but all had falls in prices of 15 per cent, 10 per cent and five per cent respectively.

As belts tighten, Ciesielski said there could be a similar downward trend in demand for art collections over the coming year given the slower auction results in 2023, which will challenge the asset class as the current leader of the luxury index.

But for those still buying, it needs to be stored and developers are now being required to build homes to accommodate the expensive merchandise.

Erin van Tuil, Knight Frank head of residential, said the collections of high-net-worth-individuals can shape their homes, “but equally their homes can shape their collections”.

“Space to show off luxury collectables is often on the wish list for wealthy home hunters, including garage spaces, great wine storage, a safe for watches and jewellery, and space to hang their art,” van Tuil said.

“Accordingly, developers are also increasingly factoring the collecting habits of potential buyers into their projects.”