Art and watches lead the comeback
Impressionist art was the strongest performing category in 2025, growing 13.6% over the year. Knight Frank said the profit was driven by strong single-owner sales and high-profile auction results, including that of Gustav Klimt Portrait of Elisabeth Ledererwhich fetched $236.4 million, the highest price ever for a modern work of art sold at auction.
Modern art rose 7.1%, post-war art gained 5.2%, and the top 100 artists category rose 3.6%. European Old Masters also posted a gain of 1.7%, indicating that buyers remained active in segments where scarcity and quality were evident.
Watches rose 5.1%, supported by strong demand for Patek Philippe’s Aquanaut and Nautilus models and continued strength from Rolex. The category has become one of the most closely watched areas in luxury investment, with buyers focused on popular models, condition and long-term cash flow.
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 discerning phase. Collectors are increasingly prioritizing rarity, provenance and cultural resonance – and younger generations are reshaping the digital platforms of ownership models.”
Classic cars are losing 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 auctions in the US and Europe 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 significance.
Knight Frank pointed to the record $10.1 million sale of Jane Birkin’s personal Hermès Birkin bag as an example of how provenance is influencing buyer behavior. The handbag category was broadly stable in 2025, with Birkin values falling just 0.2%.
Fancy colored diamonds held ground over the year, falling 1% overall, while blue diamonds appreciated in the fourth quarter.
New investors change access
Fractional ownership platforms also gained traction, driven largely by investors under 40 seeking access to rare assets in watches, art, cars and other luxury categories.
The change suggests that new buyers are approaching luxury assets differently, with some opting for shared access to high-value collections rather than outright ownership.
Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation and the big changes 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 news to feature-length shows and high-profile interviews. Nivetha has interviewed Prince Khaled bin Alwaleed Al Saud, Indian ministers Hardeep Singh Puri and N. Chandrababu Naidu, the 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 perhaps explains her weakness for data, context and a good follow-up question. When she’s away from her keyboard (AFK), you’ll most likely find her at the gym with an Eminem playlist, enjoying One Piece, or exploring games on her PS5.
