Rich South Africans are spending big money on this luxury item

Despite the challenging economic environment, rich South Africans are spending more on luxury wines.

Although the KFLII outperformed the FTSE 100 index’s 5% rise and gold’s 1% growth, it was still the weakest annual increase since Q2 2021. Knight Frank said that tangible assets are thus not immune to market uncertainty. “However, the top of the Burgundy market peaked around that time and has since fallen by at least 9%. Published prices tend to lag realised sales, indicating that there is further to fall.”

“When interest rates have risen sharply to around 6%, new releases in particular, according to market economics, should be offered at a bigger discount to future value in order to convince consumers to spend on wine instead of holding cash. If wine markets are looking toppy with limited obvious upside for new releases, there’ll continue to be downward pressure exerted on secondary market prices more widely,” he said.

“For example, while gold has typically been a popular investment in trying economic conditions, personal luxury goods like the Louis Vuitton Favorite handbag has outperformed this commodity over the past five years with an annual return of 263%. Gold, on the other hand, only returned 67% within the same period.”

Source: News Formal (newsformal.com)

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