By Dearbail Jordan Business reporter, BBC News

How much is a handbag worth? Say £100? Maybe £500? Perhaps even £1,000?

How about handing over $380,000 (£279,000) for one bag – and a second-hand one at that?

For that price, you could buy a house in the UK (where the average dwelling costs £223,285, according to the Halifax) and still have plenty left over.

Yet astonishingly last year someone did pay that amount of money for a rare 2014 Himalaya Birkin – a matte white handbag by Hermes.

It was fashioned from Nilo crocodile hide and adorned with 18-carat white gold and diamond-encrusted details.

While £279,000 is a record breaking price tag for this “holy grail” of handbags, it is a drop in the ocean when it comes to the increasingly lucrative market for buying and selling pre-owned luxury “arm furniture”.

High-end bags have come a long way from the days when Princess Grace of Monaco used an Hermes Sac a depeches to hide her growing baby bump from the paparazzi. It was subsequently renamed the Kelly bag after the former Hollywood star.

Expensive handbags are now ubiquitous among celebrities such as reality TV personalities Kim Kardashian West and her mother Kris Jenner.

However, these bags are no frivolous trinkets.

Auction house Christie’s says the global pre-owned luxury handbag market has jumped from being worth £5.1m in 2011 to £26m in 2016.

Heritage Auctions believes that the worldwide secondary auction market for the “ultra high-end bags” is between $75m and $100m “and growing”.

In investment terms, these assets can offer a huge return on your cash.

Investment bank Jefferies reckons that some bags can generate returns of about 30% a year.

Handbags made by Hermes, the French luxury goods house, are the most sought-after.

 

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