Art and watches lead the rebound
Impressionist art was the strongest-performing category in 2025, rising 13.6% during the year. Knight Frank said the gain was driven by major single-owner sales and standout auction results, including Gustav Klimt’s Portrait of Elisabeth Lederer, which achieved $236.4 million, the highest-ever price for a modern artwork sold at auction.
Modern art rose 7.1%, postwar art gained 5.2%, and the top 100 artists category increased 3.6%. European Old Masters also posted a 1.7% gain, showing that buyers remained active in segments where scarcity and quality were clear.
Watches rose 5.1%, supported by strong demand for Patek Philippe’s Aquanaut and Nautilus models and continued resilience from Rolex. The category has become one of the most closely watched areas in luxury investing, with buyers focusing on recognisable models, condition and long-term collectability.
Liam Bailey, global head of research at Knight Frank, said: “After a cycle defined by extraordinary highs followed by rapid readjustment, the luxury investment market is now entering a more rational and more discerning phase. Collectors are increasingly prioritising rarity, provenance and cultural resonance – and younger generations are reshaping ownership models through digital and fractional platforms.”
Classic cars lose ground
Several luxury categories remained under pressure in 2025. Classic car values fell 3.7%, although Knight Frank said “halo” models such as the Ferrari F50 remained in strong demand, with major US and European auctions achieving notable results.
Provenance becomes the new premium
Luxury resale trends are also changing, with collectors showing greater interest in pieces with visible history, patina and cultural relevance.
Knight Frank pointed to the record-breaking $10.1 million sale of Jane Birkin’s personal Hermès Birkin bag as an example of how provenance is influencing buyer behaviour. The handbag category was broadly stable in 2025, with Birkin values slipping only 0.2%.
Fancy colour diamonds held their ground during the year, falling 1% overall, while blue diamonds appreciated in the fourth quarter.
Younger investors change access
Fractional ownership platforms also gained traction, driven largely by investors under 40 seeking access to rare assets across watches, art, cars and other luxury categories.
The shift suggests younger buyers are approaching luxury assets differently, with some choosing shared access to high-value collectibles instead of full ownership.
Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation, and the big shifts shaping life in the Gulf. Before returning to Gulf News, she launched Finance Middle East, complete with a podcast and video series.
Her reporting has taken her from breaking spot news to long-form features and high-profile interviews. Nivetha has interviewed Prince Khaled bin Alwaleed Al Saud, Indian ministers Hardeep Singh Puri and N. Chandrababu Naidu, IMF’s Jihad Azour, and a long list of CEOs, regulators, and founders who are reshaping the region’s economy.
An Erasmus Mundus journalism alum, Nivetha has shared classrooms and newsrooms with journalists from more than 40 countries, which probably explains her weakness for data, context, and a good follow-up question.
When she is away from her keyboard (AFK), you are most likely to find her at the gym with an Eminem playlist, bingeing One Piece, or exploring games on her PS5.