The Rise of Luxury as a New Store of Value in South Africa
South African investors are increasingly shifting their attention from traditional listed equities to tangible luxury items. This change in investment strategy is driven by a desire for more stable and valuable assets, with watches, handbags, and jewellery becoming the preferred choices.
According to Luxity’s 2025 report on Africa’s luxury market, buyers are making “fewer but finer purchases,” focusing on items that maintain or even increase in value over time. This trend highlights a more deliberate approach to wealth preservation. The report notes that searches for luxury items such as jewellery have risen by 43.8%, while bag searches have grown by 14.6%.
Pre-owned luxury items are no longer seen as an alternative but as an intelligent choice. Buyers are now factoring in resale value when making decisions, which has led to a growing demand for high-quality, timeless pieces. Visibility does not necessarily equate to value, according to Luxity. Instead, savvy consumers are looking beyond the most famous labels to maximize long-term returns.
This shift in consumer behavior is reflected in the market dynamics. Moonstone Information Refinery reported that South Africa’s collective investment schemes (CIS) market experienced a record net outflow of R35.25 billion in 2024. Equity general portfolios were particularly affected, with investors withdrawing R11.95 billion.
Northstar Asset Management noted that many JSE-listed companies offer sound risk-adjusted returns at depressed levels. However, investors are treating stocks as short-term trades rather than long-term holdings. “They are buying at depressed levels and selling on any gains,” Northstar reported.
In this context, luxury items are gaining traction. Watches, bags, and jewellery provide a sense of scarcity, prestige, and long-term resale value. Pre-owned luxury is especially appealing, as it allows buyers to access high-end items at more affordable prices while still maintaining their value.
While well-known brands like Louis Vuitton and Gucci saw their combined search share drop from 30% to 21%, other brands such as Bulgari, Givenchy, and Montblanc are gaining popularity. This indicates a shift in consumer preferences towards more exclusive and less mainstream brands.
Investors are increasingly acting as analytical collectors. Every purchase is carefully weighed for quality, value, and future resale potential. This shift from equities to luxury reflects broader caution in financial markets. Moonstone’s figures on net outflows highlight investor wariness, while Northstar’s observations on trading behavior underline structural uncertainty. Together, they show why tangible luxury items are becoming a preferred alternative.
Luxity describes this maturing luxury market as “refined, data-driven and deeply discerning.” Buyers are less influenced by brand visibility and more focused on value retention. “In 2025, the smartest investment wasn’t bullion, it was the bag,” said Luxity.
Key Trends in the Luxury Market
- Shift in Consumer Behavior: Investors are moving away from traditional investments like equities and opting for tangible assets such as luxury goods.
- Focus on Value Retention: Buyers are prioritizing items that maintain or increase in value, leading to a rise in pre-owned luxury sales.
- Brand Preferences: While iconic brands like Louis Vuitton and Gucci are losing some appeal, more exclusive names like Bulgari and Montblanc are gaining traction.
- Market Dynamics: Record outflows from investment schemes suggest a cautious approach to financial markets, prompting a move toward luxury items as a safer alternative.