Times may be tough but you wouldn't know it at the top end of the investment coin market. Earlier this year, Belinda Downie of Coinworks sold a 1930 penny for an amount she will only say was above the $1.5 million mark. Whatever it was, it was a record. The current market valuation is $1.65 million.
This, of course, is no ordinary coin.
Apart from having the magical 1930 date, it is one of only six proof pennies minted that year.
Three of these ended up in private hands. The one sold by Downie is identified as the Hagley proof.
"These proof pennies were never intended for circulation but instead created as museum pieces," Downie says. "It's a totally separate process. These are produced in an artistic environment from hand-selected blanks."
She certainly views such coins as works of art. They were struck twice, which gives the edge a frame-like quality. She talks about the glow and colour in almost mystical terms.
The buyer was perhaps more interested in its investment value. His identity also remains a secret, although Downie describes him as an investor rather than a collector.
He has seen the coin and admired it but it is now locked in a safe and may remain there untouched for 10 or 20 years, while its value continues to rise. The Hagley proof penny last sold in 1997 for $147,500. A second 1930 proof penny sold in 1999 for $258,000, then in 2005 for $625,000 and again in 2009 for $800,000. Their value continues to rise.
When she first offered the Hagley coin for sale last year, Downie received three or four serious offers. The market for rare coins of this standard remains buoyant because demand will always be greater than supply.
Late last year, Coinworks set another record for the sale of a 1920 kookaburra square halfpenny, long considered one of Australia's greatest numismatic rarities. Only three are recorded.
This coin sold for $725,000.
Again, it comes with an impressive sales history. It sold in 1986 for $19,000, then in 2007 for $400,000.
Downie is also selling the impressive Madrid Collection in stages on behalf of a prominent but anonymous vendor. The total value of the collection is $12 million. Items to the value of $2 million have already been snapped up. More will be added to the Coinworks website every few months.
The buyers of rare coins tend to be wealthy businesspeople who are looking for a relatively safe, long-term investment. The returns are similar - if not better - than beachfront properties. In some cases, the coins are bought as inheritances for children.
Financial advisers can now suggest that rare coins, banknotes and stamps be included in investment portfolios. The Cooper Review recommended these and other collectables should be classified as legitimate assets in self-managed superannuation funds and the government agreed.
As a specialist in this area, Downie says she is often approached by clients with a certain value in mind and asked to recommend a coin that represents a solid investment over 10 or more years.
It could be one she picked up herself 15 years ago, such as the 1947 Perth Mint proof penny she bought for $6000 at a 1996 auction.
She remembers that this small amount - by today's standards - raised eyebrows among fellow dealers at the time.
After sitting in her safety box ever since, she decided that now was the best time to set it free. Its current value is $65,000.
$65,000
This 1947 Perth Mint proof penny has recently been sold after sitting in a safe for 15 years. It sold in 1996 for $6000.
$140,000
This Type 6 square penny is more common than the similar halfpenny but is still a valuable investment coin. This one sold for $650 in 1997.
$725,000
At the top end of the numismatic market are coins such as the 1920 kookaburra square halfpenny. It sold late last year to a Sydney investor.
Frequently Asked Questions about this Article…
What made the 1930 Hagley proof penny sold by Coinworks so valuable?
The 1930 Hagley proof penny is extremely rare and collectible: it’s one of only six proof pennies minted that year and was produced as a museum-quality piece (hand-selected blanks and struck in a separate artistic process). Coinworks sold it earlier this year for an amount above $1.5 million, and the article cites a current market valuation of $1.65 million. Its scarcity, proof finish and documented sales history (previous proof pennies sold for six-figure and then seven-figure amounts over the years) are key drivers of its high value.
Why do proof pennies and other rare coins often fetch such high prices at auction?
Proof pennies and other top-grade numismatic items are created for display rather than circulation (struck twice, with hand-selected blanks and superior finish), making them both artistically desirable and extremely scarce. The article notes demand for coins of this standard remains buoyant because supply is fixed or tiny, so serious offers are common and prices have risen steadily across multiple sales.
Who typically buys rare investment coins and what are their motives?
According to the article, buyers tend to be wealthy businesspeople and private investors who view rare coins as relatively safe, long-term investments. Some purchase coins as inheritances for children. The buyer of the Hagley proof penny was described as an investor who may keep the coin locked in a safe and untouched for 10–20 years while its value appreciates.
How have rare Australian coins performed as long-term investments?
The article gives several examples of strong long-term gains: a 1947 Perth Mint proof penny bought for $6,000 in 1996 has a current value cited around $65,000; a 1920 kookaburra square halfpenny (one of only three recorded) sold late last year for $725,000 after earlier sales of $19,000 (1986) and $400,000 (2007). The piece notes returns can be similar to — if not better than — beachfront property for high-end numismatic items.
Can rare coins, banknotes and stamps be included in self-managed superannuation funds (SMSFs)?
Yes. The article references the Cooper Review recommendation that collectables such as rare coins, banknotes and stamps be classified as legitimate assets in self-managed superannuation funds, and states the government agreed with that recommendation. Financial advisers can now suggest including such collectables in investment portfolios and SMSFs where appropriate.
How do dealers like Coinworks market and sell major collections?
Coinworks sells major collections in stages and by offering items both via auction and private sale. The article describes the Madrid Collection being sold in stages on behalf of an anonymous vendor, with a total collection value of $12 million and about $2 million worth of items already sold. Items are added to the Coinworks website every few months and top pieces typically attract multiple serious offers.
How are valuable coins typically stored after purchase?
The article notes that buyers of top-end coins often secure them in safes and may leave them untouched for long periods — the Hagley proof penny buyer was said to have locked it in a safe and may keep it untouched for 10 or 20 years while its value rises. This highlights the common practice of secure, long-term storage for high-value numismatic investments.
What should everyday investors consider before buying rare coins as an investment?
Based on the article, everyday investors should consider rarity, documented provenance and sales history, the long-term nature of returns, and specialist advice. Belinda Downie (Coinworks) is frequently approached by clients asking for coins that represent solid investments over 10+ years, so matching budget and time horizon — and consulting a numismatic specialist or adviser — are important steps supported by the market behavior described.
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