Value enhancement instead of loss: How to strategically preserve the value of your luxury goods
Do you own valuable watches, art, or classic cars and wonder how to not just preserve their value but increase it? Many luxury items lose value without the right strategy – but it doesn’t have to be that way. This guide shows you how to fully leverage the financial potential of your treasures using data-driven methods and expert knowledge.
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The topic briefly and concisely
The value retention of luxury goods depends on brand, rarity, condition, and demand; data-driven analysis is crucial.
Selected luxury watches, classic cars, and handbags have yielded returns of over 20% per annum in recent years.
Professional care, seamless documentation, and strategic sales planning are essential for increasing value.
The German luxury goods market reached a volume of around 15.3 billion euros in 2023, and the trend is rising. But how can the ownership of exclusive items be transformed into a sustainable investment? Many owners and heirs face the challenge of correctly assessing and securing the value of their collections. Without a well-founded strategy, even prestigious goods can lose value. This article provides you with a clear, data-driven roadmap to not only secure but actively increase the value retention of luxury goods and avoid common pitfalls.
The luxury goods market: More than just superficial glamour
The global market for personal luxury goods reached a record volume of €362 billion in 2023. In Germany, the sector is also growing steadily and is forecasted to achieve a compound annual growth rate (CAGR) of 7.9% by 2027. These figures demonstrate that luxury is more than just consumption; it is an established economic segment with its own rules. For owners, this means their assets are part of a dynamic market.
What drives this market? It's a mix of exclusivity, brand image, and increasing demand from new buyer groups. Over 14 million Germans happily purchase expensive items, a number that has increased by almost 3 million since 2010. The key to retaining value lies in understanding the specific drivers of the respective luxury segment. A data-driven market analysis for the luxury market is therefore essential to making informed decisions. Analyzing the right metrics distinguishes a successful investment from a stagnating one.
Watches as an Investment: Precision in the Portfolio
Did you know that the secondary market for luxury watches has shown stabilization after a correction phase since October 2024? The ChronoPulse Watch Index recently recorded a slight increase of 0.35 percent. Brands like Breitling (+8%), TAG Heuer (+4.52%), and Cartier (+8.47% in the first half of the year) demonstrated remarkable positive value development. This proves that even in volatile times, certain models maintain high value stability.
Performance strongly depends on the brand and model. A five-year analysis shows impressive gains for selected brands:
Audemars Piguet: +64.85%
Vacheron Constantin: +52.27%
Cartier: +39.06%
Rolex: +27.59%
These figures highlight the potential inherent in the right selection. Models benefiting from the "Quiet Luxury" trend, such as the Cartier Santos, have more than doubled in value in some cases. The demand for Certified Pre-Owned Watches (CPO) is growing strongly, creating additional trust. A professional luxury goods appraisal helps you identify the value-driving characteristics of your watch. This lays the foundation for a well-informed selling or investment strategy.
Classic Cars: Return on Four Wheels
Classic cars are more than just a hobby; they are a recognised asset class. The German Oldtimer Index (DOX) shows that the top 10 vehicles achieved an average value increase of 18.5% in 2024. Over the past five years, marked by inflation, the value increase in the top segment was even 84.2%. This clearly outperforms many traditional forms of investment.
What factors determine a classic's value? There are mainly three aspects:
Rarity: A production total of fewer than 1,000 units is often an indicator of high value appreciation potential.
Condition and history: An uninterrupted documented original condition and a prominent history can multiply the value.
Features: Unusual colours or rare features, like a manual transmission in certain Ferrari models, significantly increase the price.
The emotional return is high, but the financial return requires expertise. The ongoing costs for maintenance and insurance must not be underestimated. An accurate valuation of luxury goods is crucial to realistically assess a vehicle's potential. Only then does passion become a wise investment.
Handbags and Art: The Silent Yield Generators
Did you know that a Hermès Birkin Bag achieved an annual return of 38% in 2020? These handbags are a prime example of the successful value retention of luxury goods. A Birkin 25, which cost around €13,500 on the secondary market in 2020, was already trading for an average of €24,000 by 2022. The value is driven by extreme scarcity, craftsmanship, and pop culture.
The art market also offers attractive opportunities, but it is very complex. The global art market has proven to be stable and is less susceptible to economic crises than other markets. Certain segments, such as contemporary art, have outperformed the S&P 500 by 240% since 1986. However, one cannot invest in an index; success depends on selecting the right artist and work. The luxury goods valuation experts at Auctoa can help you objectively determine the value of your collectibles. An unbiased valuation protects against the dangers of incorrect valuations in luxury goods.
Strategies for Value Enhancement: What Really Matters
How can you actively increase the value of your luxury items? The key lies in a proactive and informed approach. Professional care and optimal storage are fundamental. Regular maintenance can reduce depreciation by up to 75%. This applies to both the movement of a Patek Philippe and the body of a Porsche 911.
Documentation is another crucial factor. A complete provenance with original invoices, certificates, and service records can increase an item's value by 20-30%. The following points are crucial:
Authenticity: Have the authenticity confirmed by recognised luxury appraisal guidelines.
Condition: Invest in professional refurbishment, but maintain originality.
Timing: Do not sell under pressure. Observe the market to find the optimal timing.
Insurance: Ensure adequate insurance options for luxury items to protect against loss or damage.
The use of data-driven analyses, such as those offered by our ImmoGPT, can help you identify market trends. This way, you make decisions not based on intuition but on valid data. This strategic approach is the transition from mere ownership to active asset management.
Risks and Tax Aspects: What You Need to Consider
Investments in luxury goods are not without risks. The market can be volatile, influenced by economic cycles and changing trends. Unlike stocks or bonds, luxury items are illiquid. Selling them can take months and involves transaction costs. Additionally, there is a risk of counterfeits and the need for expensive insurance and storage.
Tax aspects also need to be considered. If you sell a luxury item in Germany within one year of purchase at a profit, income tax is generally due if the exemption limit of 1,000 euros is exceeded. After this speculation period, the profit is usually tax-free. A precise documentation of the purchase date and price is therefore essential for every collector and investor. In complex inheritance cases or larger collections, professional advice, which can also include the valuation of luxury real estate, is crucial. Always clarify your tax situation with an expert.
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The preservation of value in luxury goods is not a matter of chance; it is the result of a deliberate strategy. It requires market knowledge, careful selection, and proper maintenance. As data shows, selected watches, classic cars, or handbags can yield returns that surpass traditional asset classes. The key is to combine emotional passion with objective, data-driven analysis. Use tools such as Auctoa ImmoGPT or a professional valuation to make informed decisions. This way, your portfolio of luxury goods can become a source of joy and financial success. Act strategically to realise the full potential of your assets.
Additional useful links
Statista provides an overview of the luxury goods market in Germany from a CMO perspective.
Mintel offers a market report on attitudes towards luxury in Germany.
Mordor Intelligence presents an industry report on the luxury goods market in Germany.
The Zukunftsinstitut discusses future trends and topics in the luxury market.
Statista provides statistics on the market volume in the luxury goods segment in Germany.
The Süddeutsche Zeitung reports on a study highlighting expenditure of 1.5 trillion euros in the luxury market in 2024.
Business Insider discusses Gen Z's attitude towards luxury and what they continue to spend money on.
Wikipedia offers a general definition and overview of luxury goods.
Spherical Insights provides a report on the German luxury goods market.
Fortune Business Insights delivers insights into the luxury goods market.
FAQ
What is the first step to secure the value of my luxury items?
The first and most important step is a professional and neutral valuation. Only by knowing the current market value and the factors driving your property's value can you develop a well-informed strategy for maintenance, insurance, and a potential sale. Contact us for a non-binding initial consultation.
How can Auctoa help me preserve value?
Auctoa offers AI-powered, data-driven assessments for luxury goods and real estate. We provide you with an objective basis for your decisions, free from conflicts of interest. Our ImmoGPT chat can also answer initial questions about market trends and help you better understand the potential of your valuables.
What role does provenance play in preserving value?
Provenance, which refers to the comprehensive documentation of an object's origin and history, is extremely important. Original papers, purchase receipts, service invoices, and certificates can increase the value of a luxury item by 20-30% as they conclusively demonstrate authenticity and ownership history.
Is it worth investing in a repair before selling?
It depends on the item and the extent of the repair. Minor, professionally executed repairs can increase the value. However, for vintage cars or rare watches, improper restoration can also reduce the value. It is advisable to obtain an appraisal in advance to weigh the right measure.
How often should I have my collection appraised?
The market for luxury goods is dynamic. We recommend having your collection re-evaluated by an expert every 2 to 3 years. This ensures that your insurance coverage is up-to-date and that you don't miss any optimal selling opportunities.
What is the greatest risk in luxury investments?
Besides market volatility, illiquidity is one of the greatest risks. Unlike a stock, a rare artwork or a classic car cannot be sold with a click of a mouse. The sales process can take months and requires the right network. Therefore, forward planning is essential.
