The market for luxury collectibles ended 2025 almost flat, but the average hides a wide spread: watches climbed, fine wine slid and the most famous handbags barely moved. This article sets out what the latest Knight Frank figures show, how to read them and where they stop being useful.
What did the Luxury Investment Index do in 2025?
According to Knight Frank, whose Luxury Investment Index (KFLII) update was dated 23 April 2026, the index closed 2025 down 0.4%. Knight Frank described it as “a year of stabilisation after two years of losses”, with losses recorded in 2023 and 2024. Over the longer run the picture is better: the same release says the KFLII has risen 38.6% over the past decade.
Those two figures are easier to judge with some illustrative arithmetic. A hypothetical £100,000 tracking the index would have become about £99,600 after a 0.4% fall. A 38.6% decade-long rise would turn £100,000 into £138,600, which is roughly 3.3% a year when compounded over ten years. That is a modest pace for a group of assets that are costly to buy, store, insure and sell, and it assumes the index could be bought at all, which it cannot.
Why is a single index a blunt instrument?
An index of collectibles blends things that have little in common: wine that is consumed, bags that are worn, art that hangs on a wall. Each has its own buyers, its own dealers and its own cycle. Knight Frank’s release does not set out the index’s construction in the passage reviewed, and it presents the watch, wine, bag and art figures as separate market measures rather than as inputs that can be added up. Readers should therefore treat the headline as a mood indicator, not a portfolio return.
Which categories moved, and by how much?
The figures below are the ones Knight Frank cited for the most recent year, each from a different underlying measure.
| Category | Measure cited | Movement |
|---|---|---|
| Watches (all) | WatchCharts Overall Market | +5.1% over the last year |
| Rolex | Rolex Market Index | +4.6% |
| Patek Philippe | Patek Philippe Market Index | +12.1% |
| Fine wine | Liv-ex Fine Wine 100 | -2.5% in 2025 |
| Hermès Birkin and Kelly | Resale pricing | -0.2% over 2025 |
| Fine art | Combined auction house sales | +11% year on year |
The last row is a different kind of number. Art is reported as total sales at major auction houses, which is a measure of turnover, not of how much an individual work gained in value. A busy sale season can lift totals even if the typical price per work is flat.
Why did watches do better than most?
Watches were the clearest positive in the release. Knight Frank noted that the Rolex index rose 4.6% “with nearly all models posting solid performances”, while Patek Philippe’s index outpaced it at 12.1%. The release also calls Rolex a bellwether for the secondary market, which is a sensible way to see it: Rolex is the most traded name, so its direction sets the tone.
This fits the pattern described in our earlier look at why the watch market is behaving differently. A market that has already corrected from its peak, and in which buyers are more selective, tends to reward the best-known references and punish the rest. The data here show the top of the market recovering; they do not say that every watch has gained.
Has fine wine finished falling?
Not on these figures. According to Knight Frank, the Liv-ex Fine Wine 100 index fell 2.5% in 2025, leaving total losses at almost 25% since its 2022 peak.
The arithmetic of a drawdown is unforgiving. If a holding falls by almost 25% from a peak, it must rise by about a third to get back, since £100,000 falling to roughly £75,000 needs a gain of £25,000 on £75,000, or 33%. A 2.5% annual decline is slow compared with the earlier fall, which suggests the pace of loss has eased, but a slower decline is still a decline. Wine also carries storage and insurance costs and, unlike a watch, is a product that matures and is eventually drunk.
What does a 0.2% fall in handbag prices tell us?
Knight Frank said Hermès Birkin and Kelly bags “have retained their pricing power, down only marginally at -0.2% over 2025”. That is worth noting because these bags are often cited as the strongest example of a fashion item behaving like an asset. A flat year is consistent with that reputation, but it is not an endorsement: one narrow product line from one house says little about handbags in general.
It also highlights how thin the evidence for luxury as a store of value can be. Prices for rare items are set by a small number of transactions, and the published figures reflect what sold, not what failed to find a buyer.
What worked example shows the spread between categories?
Illustrative arithmetic makes the divergence concrete. Take £10,000 notionally placed in each measure at the start of 2025, ignoring every cost of buying, holding and selling:
| Measure | Movement | Notional value after one year |
|---|---|---|
| Patek Philippe Market Index | +12.1% | £11,210 |
| WatchCharts Overall Market | +5.1% | £10,510 |
| Rolex Market Index | +4.6% | £10,460 |
| Hermès Birkin and Kelly | -0.2% | £9,980 |
| Liv-ex Fine Wine 100 | -2.5% | £9,750 |
The gap between the best and worst rows is £1,460, or 14.6 percentage points, in a single year. The exercise is purely arithmetical: no one could have held each of these measures at no cost, and the real result of any actual purchase depends on the particular item, the price paid and the price achieved at sale.
How do the numbers compare with the buyers themselves?
Prices are only half the story. The people behind them matter just as much, and our coverage of the shrinking luxury customer base examines how the pool of regular buyers is changing. A thinner buyer base can make resale prices for ordinary pieces fragile even while rare ones hold up. The same applies to taste: our piece on what is replacing quiet luxury looks at how changing preferences can move demand between categories.
Analysis, rather than reported fact, would suggest that the divergence in 2025 reflects this sorting. Scarce, well-documented items from established names attract the remaining buyers, while categories with large supply or high holding costs lag. That is an interpretation of the data, not something the index proves.
What the figures cannot tell a buyer
Several limits apply to every collectibles index, and they matter most for readers tempted to treat a one-year percentage as a guide to what an object will fetch in future. Published indices summarise completed sales in a thin, opaque market, and the person selling a particular piece will meet a particular buyer, not an average.
- Costs are excluded. Auction commissions, dealer margins, insurance, storage and servicing all come off a return that an index typically does not net out.
- Averages hide dispersion. A category can rise while most individual items fall, because the headline is driven by the best-known names.
- Past movement is not a forecast. A year of stabilisation does not tell anyone what happens next.
- Authenticity matters. Value depends on provenance and condition. For precious metal items, a legal check exists in the form of UK hallmarks on gold and silver, though it confirms purity and says nothing about price.
A flat year with an uneven message
The 2025 numbers describe a collectibles market that has stopped falling overall without recovering evenly. Watches, led by the best-known brands, posted gains; wine remained in a long retreat; bags held their ground; and art turnover improved. For readers, the sensible use of such data is to understand where the market’s attention sits, and to remember that a published index measures prices that have already happened.
This article is general information, not personalised financial advice; markets, rules and rates change.
Sources: Knight Frank
