Luxury watch prices continue to decline on the secondary market, extending a trend that began two years ago as investors shift their focus to equities and other investments offering better returns.
Market Shift
Top Swiss brands such as Rolex, Patek Philippe, and Audemars Piguet experienced a dramatic surge in the secondary market in early 2022. During the pandemic, homebound consumers funneled their savings into high-end timepieces, driving prices to unprecedented levels. However, this trend has reversed. According to data from Subdial, a UK-based watch trading platform, the Bloomberg Subdial Watch Index, which tracks the 50 most-traded watches by transaction value, saw a less than 1% decline in June. Over the past year, the index has dropped 8%, and over two years, it has fallen 23%. In stark contrast, the S&P 500 Index, the US stock market benchmark, surged by 27% in the past year.
Speculator Impact
In the 12 months leading up to June 2022, the Bloomberg Subdial Watch Index increased by 40%, while the S&P 500 declined by about 1%. Many of the most-traded models still sell above retail prices. However, speculators who invested heavily in the watch market, expecting continual appreciation, have exited as equities and other investments offer superior returns.
Brand-Specific Trends
Despite the overall downturn, some brands have seen rising prices. The Subdial index for Cartier watch prices has increased by almost 2% over the past year. Cartier timepieces, produced by the French jewelry brand owned by Richemont, have grown more popular among collectors. Cartier watches are generally less expensive than those from Rolex, Patek Philippe, or Audemars Piguet and often sell below retail value.
Mixed Performance
In June, Rolex models, which constitute the majority of the index, remained largely stable, while sister brand Tudor saw a decline. Prices for entry-level luxury watches, including Swatch Group’s Omega and the Cartier brand indexes, showed modest gains during the month, according to Subdial’s data.
Conclusion
As the luxury watch market continues to adjust post-pandemic, the shifting focus of investors toward more lucrative equities highlights the volatility and speculative nature of high-end timepiece investments. Despite some brands maintaining or gaining value, the overall trend reflects a market correction from the heights of the pandemic-era surge.
