Luxury watch prices have dropped to nearly the lowest point in two years on the secondhand market, marking a reversal from the pandemic-driven rally that pushed renowned brands like Rolex, Patek Philippe, and Audemars Piguet to all-time highs.
According to WatchCharts, a luxury watch price tracking service, the average second hand watch price has experienced a significant decline of 31% since March 2022. At the market’s peak, these sought-after timepieces were selling for an average of $45,108, with some buyers shelling out up to five times the retail price to acquire their desired models.
Paul Altieri, CEO of Bob’s Watches, described the past period as an extraordinary moment in history when people were confined to their homes. During this time, there was also a surge in cryptocurrency and bitcoin values. He characterized the current situation as a positive and necessary adjustment in the market.
Throughout the pandemic, individuals who found themselves at home and with extra funds from stimulus measures indulged in luxury spending. Since numerous watch models were unavailable at retail stores, enthusiasts turned to the secondhand market for their purchases.
Tim Stracke, CEO of Chrono24, a German-based online marketplace for pre-owned watches, pointed out that the significant price increase was mainly seen in three family-owned brands: Rolex, Patek Philippe, and Audemars Piguet. However, most other watch brands did not experience similar trends during the previous year.
Currently, the market is witnessing an influx of individuals offering the same inventories, resulting in a decline in overall prices. This downturn is particularly pronounced for renowned models such as Rolex’s Daytona, Patek Philippe’s Nautilus, and Audemars Piguet’s Royal Oak, as noted by Stracke.
According to Stracke, when prices escalate to exceptionally high levels, it also stimulates an increase in sellers.
Luxury Watch Market
There have been warnings from experts about a potential burst of the luxury watch bubble, paralleling the uncertainties in the cryptocurrency and other trendy booms experienced during the pandemic.
Over the past year, the prominent luxury watch brands have experienced a slump in prices. According to WatchCharts, average second hand prices for Rolex fell by 12%, Patek Philippe by 19%, and Audemars Piguet by 17% compared to a year ago.
However, it appears that the recent declines signal a stabilization in the market. Despite the downturn, the secondhand market still maintains significantly higher price levels compared to three years ago. Since August 2020, overall prices have increased by approximately 20%, with average Rolex prices up by 26%, average Patek Philippe prices up by 94%, and Audemars Piguet prices up by 100%, as reported by WatchCharts.
Take, for instance, the Rolex Cosmograph Daytona 116500 model, which holds significant weight on the WatchCharts index. Currently, it is listed at approximately $29,000, nearly double its original retail price. Similarly, the Patek Philippe Nautilus 5711 Stainless Steel model commands an average price of $103,357, representing a threefold increase from its original retail listing of $34,890, as reported by WatchCharts.
Despite some adjustments in 2023, overall prices have remained considerably higher than they were before the pandemic. Pierre Dupreelle, managing partner at Boston Consulting Group, believes that these adjustments do not indicate a bursting of the bubble. He suggests that as the economy stabilizes, prices may also stabilize or potentially start rising again.
These relatively lower prices could present a favorable opportunity for a new generation of shoppers and collectors to enter the market.
Rising Interest and Changing Perspectives
Millennials and Generation Z are showing a growing interest in luxury watches and status symbols. According to a recent BCG report, 54% of Gen Z and millennial buyers reported an increase in their spending on luxury watches over the past two years.
Brian Burns, a millennial adventure guide and proud owner of a Rolex Submariner, expressed his desire to purchase another Rolex. He noted that the price decline has made it feel less like a risky investment, emphasizing the advantage of waiting to buy at a more favorable price.
Likewise, 20-year-old Penn State University student, Chan Hirunsri, shared his appreciation for the craftsmanship of watches. He made a purchase of a Grand Seiko SBGA407 in May when prices were relatively low and now awaits the opportunity to explore Rolex models for potential acquisitions.
Luxury watch prices have experienced a significant decline, particularly for iconic brands like Rolex, Patek Philippe, and Audemars Piguet. While the market has stabilized, prices still remain higher than pre-pandemic levels. Experts believe it’s not a bubble burst, but a correction. Meanwhile, millennials and Gen Z are increasingly drawn to luxury watches, seeing the current market as an opportunity for investment and appreciation of craftsmanship.