There’s no harm in investing in something that makes your money grow substantially in value over the years.
It wasn’t too long ago when we told you everything you need to know about classic cars, but now we’re going to talk about South African wines.
According to Knight Frank’s latest Luxury Index (KFLII), wine has “overtaken collectable cars as the most popular luxury investment for the world’s super-rich,” reports Business Tech:
The value of the Knight Frank Fine Wine Icons Index rose by a 24% in the 12 months to the end of March 2017, while the HAGI Top Index, which tracks the performance of the world’s most collectable cars, managed a relatively modest rise of just 6% over the same time.
The wine element of the index, compiled by Nick Martin of Wine Owners, shows a “resurgent demand for Bordeaux and Burgundy wines, amplified by the decline in the value of the pound, has helped to boost the market”:
“Catastrophic frosts that affected up to 80% of the crop in the best Burgundy vineyards mean there is very little stock of the 2016 vintage,” said Martin.
“A lot of the growth has come on the perception of scarcity, but the most sought-after Burgundies might have hit a peak and it feels a bit toppy to me.”
Check the graph below to see the various investment opportunities and their value increase percentage:
Roland Peen, director of fine wine merchants Wine Cellar, noted that wine as an investment in South Africa is a pretty good idea:
“In the last five years South African wine has reached a new point of local and international interest,” he said.
“There has been a surge of quality as winemakers have discovered precious old vineyards, vineyard quality has increased and winemaking in general has been improved. South Africa is now producing some of the hottest and most highly sought-after wine in the world.”
He noted that South Africa’s wine was still relatively cheap compared to similar quality wines from Europe and the US.
“We also produce fine wines in small volumes, which means demand exceeds supply and there is ample room for price growth. Customers are therefore seeing opportunity to make money in buying fine wine and selling them at a later stage.”
Cheaper and helluva tasty.
Although our wines are yet to enter the European-dominated market, Peen said they had seen increasing traction as a secondary market – and the rarity of the wines as a result of low production levels is only increasing the benefits: .
“A top Chateau from Bordeaux will produce 20,000 cases every vintage, whereas a leading South African red will be under 1,000 cases.”
Absolute quality – these are the local wines you should look at:
Blue Chip wines such as Kanonkop, Boekenhoutskloof, Rustenberg and Klein Constantia always appreciate well.
The next time you’re staring at the wine rack looking for a something to buy, add a bottle or two of Boekenhoutskloof to your basket, you know, for ‘investment’ reasons.
Good luck not drinking it, though, for once you have a taste, it’s going to be difficult to put the bottle down. You might end up sipping away your investment in a Bernard and Manny-like situation:
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