The Bloomberg Subdial Watch Index has reported a continued decline in the prices of Rolex watches in the secondary market. This unexpected trend has raised eyebrows among watch enthusiasts and collectors, as Rolex has enjoyed a reputation as one of the most prestigious luxury watch brands globally.
While the brand’s enduring appeal and craftsmanship have been unquestionable, recent market dynamics have placed Rolex behind competing brands, including Cartier and Omega.
Rolex watches, once seen as long-lasting investments, have been losing value. This decline is due to multiple factors that have come together in recent years.
To delve deeper into the underlying reasons behind this unexpected price drop and its implications for watch enthusiasts and the luxury watch industry, let us explore the intricacies of this evolving situation.
A Price Shift in Luxury Watch Secondary Market
According to the Bloomberg Subdial Watch Index, Rolex experienced a significant 2.2% decrease in market prices, signaling a noteworthy shift in the luxury watch market.
This decline can be primarily attributed to a sense of caution among collectors who have become wary of investing in top-tier timepieces, especially in the wake of substantial price surges in 2021 and 2022.
Interestingly, while seeing the most substantial drop in pricing, Rolex was not alone in this trend, as all major watchmakers reported negative results.
Omega, renowned for iconic pieces like the Speedmaster Moonwatch, saw a 1.2% decrease in its watch prices.
At the same time, Cartier, with models including the Tank and Santos, experienced the most minor decrease at 0.4%. Tudor, Rolex’s more budget-friendly sibling, declined by 1.8% in its pricing.
The trend of declining watch prices extended beyond the established luxury brands. An index tracking 100 newer watch labels, focused on timepieces priced below $9,120 or around IDR 142,5 million, collectively saw a decrease of approximately 0.8%.
This market-wide decline, which first manifested in April 2022 after record-breaking price increases among leading watchmakers, can be attributed to several factors, most notably the rising interest rates and the unstable performance of cryptocurrencies.
Over the last six months, the Bloomberg Subdial Watch Index, responsible for reporting data on the 50 most-traded timepieces, witnessed a noteworthy 5% decrease in watch prices.
In contrast, the Entry-Level 100 Index, tracking more affordable options, experienced a milder decline of just 0.7% during the same period.
These statistics underscore the evolving dynamics in the luxury watch market, raising questions about the future direction of this highly coveted segment of the luxury goods industry.
What’s Driving the Downward Price Trend in Secondhand Luxury Watches?
The decline in prices of luxury watches in the secondary market can be attributed to several interconnected factors, with one of the primary reasons being the global economic state, particularly in the aftermath of the COVID-19 pandemic.
During the pandemic, people were at home with extra money from government stimulus, resulting in increased luxury spending, including buying high-end watches.
Supply chain disruptions made specific watch models scarce at retail, prompting enthusiasts and collectors to turn to the secondary market for sought-after timepieces. This boosted demand for pre-owned luxury watches and drove prices up.
As time passed, those who purchased luxury watches during the pandemic reevaluated their holdings. The secondary market became oversaturated with people looking to resell their watches, causing prices to drop and overall market values to decline.
Iconic models like Rolex’s Daytona, Patek Philippe’s Nautilus, and Audemars Piguet’s Royal Oak, known for their prestige, saw their prices soften due to the flood of offerings, worsening the overall decline in luxury watch prices.
Is It Still Worth to Buy a Luxury Watch?
While luxury watch prices have experienced a noticeable decline recently, these decreases may signal a much-needed stabilization in the market. It’s important to note that despite the drops, the secondhand watch market still stands well above price levels from just three years ago.
As reported by WatchCharts, overall prices are approximately 20% higher than in August 2020, with average Rolex prices up by 26%, Patek Philippe prices up by an impressive 94%, and Audemars Piguet prices soaring by 100%.
The relatively lower prices present an enticing opportunity for a new generation of shoppers and collectors. Millennials and Generation Z are showing a growing interest in luxury watches and the associated status symbols.
A recent report by BCG revealed that 54% of Gen Z and millennial buyers have increased their spending on luxury watches in the past two years.
Furthermore, the lower prices could allow watch enthusiasts to invest in these timepieces. Purchasing a Rolex or similar luxury watch at a reduced price presents the potential for increased value in the future, making it a worthwhile investment.
The declining prices may, counterintuitively, reduce the perceived risk associated with such investments. After all, why pay more for an item when waiting could allow you to acquire it at a lower cost?
The recent drops in the secondary market for luxury watches present a unique opportunity, especially for younger and newer collectors looking to enter the world of horology.
You can take advantage of this opportunity is Luxehouze, a reputable destination for both brand-new and pre-owned luxury timepieces.
Luxehouze boasts an extensive collection of watches, catering to a wide range of tastes and preferences. What sets Luxehouze apart is its team of dedicated Client Advisors, who are readily available to provide expert consultation to prospective buyers.
Whether you’re considering a watch as an investment or adding to your collection, these advisors offer valuable insights to help you make an informed decision.
All items in Luxehouze inventory are guaranteed 100% authentic, giving customers peace of mind when purchasing.
In addition to its online marketplace, Luxehouze also maintains a physical boutique at Prosperity Tower, SCBD, South Jakarta. If you prefer a more traditional shopping experience or want to see the watches in person before selecting, visiting the Luxehouze Boutique is a great option.
