Luxury watch prices continue to decline in the secondary market, extending a downward trend that began two years ago. This shift is largely attributed to investors redirecting their focus from luxury timepieces to equities, which have shown more promising returns in recent months.
Bloomberg Subdial Watch Index
The Bloomberg Subdial Watch Index, which tracks the 50 most-traded watches by transaction value, experienced a minor decline of less than 1% in June. Over the past year, the index has fallen by 8%, and it has seen a 23% decrease over the past two years. In contrast, the S&P 500 Index, a benchmark for the US stock market, has surged by 27% in the past year.
Pandemic-Era Boom and Subsequent Decline
Top Swiss watch brands like Rolex, Patek Philippe, and Audemars Piguet saw unprecedented price increases on the secondary market during the early stages of the pandemic. During the 12 months leading up to June 2022, the Bloomberg Subdial Watch Index soared by 40%, even as the S&P 500 fell by about 1%. This surge was driven by consumers spending their pandemic savings on luxury items, including high-end watches.
However, as the pandemic-era rally waned, so did the speculative investments in luxury watches. Investors who had bet on continuous appreciation of these timepieces have shifted their focus to equities and other investments, which have offered better returns recently.
Current Market Trends
Despite the overall downturn, some watch brands have seen price increases. The Subdial index for Cartier watches has risen by almost 2% over the past year. Cartier timepieces, produced by the French jewelry brand owned by Richemont, have grown in popularity among collectors. Unlike Rolex, Patek Philippe, and Audemars Piguet, Cartier watches are generally less expensive and often change hands at values below their retail prices.
In June, prices for Rolex models, which dominate the Subdial index, remained largely flat. Sister-brand Tudor saw a decline, while entry-level luxury watches, as well as models from Swatch Group AG’s Omega and the Cartier brand, showed modest gains.
Conclusion
The luxury watch market, particularly for high-end brands like Rolex and Patek Philippe, has experienced significant volatility in recent years. While the market remains attractive to collectors, the recent trend suggests a shift in investment focus as equities continue to provide more lucrative returns. Despite this, brands like Cartier are gaining traction, offering a silver lining for those invested in the luxury watch market.
