Do Luxury Handbags Make Smart Investments?

With headlines from reputable news outlets declaring luxury handbags a better investment than art, watches and even classic cars, can women really turn to their bags as a viable option?

- Charmaine Ho

It's tempting to think of designer handbags as alternative investments that help diversify your portfolio. After all, according to London-based art and collectible analysts Art Market Research's Luxury Handbag Report 2020, bags from the infallible trio of Hermes, Chanel and Louis Vuitton saw a valuation spike of an average 80 per cent in the last decade.

This outperforms first-edition books and even watches, which saw an increase of 40 per cent and 72 per cent, respectively. And if that is not enough to convince, it has also been reported elsewhere that the price of Chanel handbags has increased by 100 per cent over the last decade, outstripping the stock market's comparatively conservative 10 per cent and gold's 21 per cent.

At first glance, figures like that leave little room to argue. So should you really be reaching out for that designer handbag in the name of investment? The bad news is: Unless you have a six-figure budget just lying around for that diamond-studded Nile crocodile Birkin (the world record holder for the most expensive bag ever auctioned at over $500,000), you might be better off putting that hard-earned cash in a handbag that sparks joy instead.

As Nejla Matam-Finn, CEO of pre-loved luxury website The Fifth Collection, says: "As a general rule of thumb, you have to expect to lose between 30 and 40 per cent [of your bag's value] as soon as you leave the boutique. The numbers can go higher, depending on the brand, with some brands performing better than others. But don't expect to get a price that's close to retail [prices], because that is almost non-existent."