Luxury watch
Rolexes have been a good investment over the years, but not like the last five, and while prices remained high until the start of 2022, it then started to gradually decline since. Image Credit: Shutterstock

Dubai: Rolex may just be the first name that comes to mind when you think of luxury watches given that the brand is widely reputed to produce some of the most expensive timepieces in the world. But have you ever thought of owning one – if not as a fashion accessory, but as an investment?

“Some watches can be a good investment. Most of you might make a profit when it’s time to sell a watch. However, if you buy the right wristwatch, you can retain some or most of the value you put into it,” wrote Paul Altieri in his widely-followed blog.

“Rolexes have been a good investment over the years, but not like the last five,” noted Altieri, while adding that while prices remained high until the start of 2022, it then started to gradually decline since. Altieri is considered one of the world's top Rolex experts and is the founder of Bob’s Watches, a reputed online reseller of luxury watches.

Some watches can be a good investment. Most of you might make a profit when it’s time to sell a watch

- Paul Altieri, founder of Bob’s Watches

Are the prices of Rolexes rising or falling now?

Aside from peaking in March last year, prices for pre-owned Rolex watches have been declining, according to WatchCharts, which provides data-driven analysis of the pre-owned watch market.

The average price of a pre-owned Rolex watch increased from less than $5,000 (Dh18,363) in 2011 to more than $13,000 (Dh47,745) by the end of 2021, as per a recent report by Bob’s Watches, with the average order price of Rolexes falling from $12,900 (Dh47,377) in May to $11,000 (Dh40,399) today.

On Chrono24, another luxury-watch online marketplace, 25 per cent of site searches are now Rolex-related – which is indicative of significant demand considering the many other luxury watches there are. Also, 14 per cent of the watches the e-retailer sells are Rolexes, and four-fifths of them are pre-owned.

Rolex
Aside from peaking in March last year, prices for pre-owned Rolex watches have been declining, according to WatchCharts.

Why are the prices of Rolexes dropping now?

“The current Rolex price correction is partly due to the negative impact of the global economic slowdown on consumer spending, while the reason for the swift rise in prices of Rolex watches in recent years is supply,” explained Ashique Abbas, head of sales at a luxury watch boutique in Al Ain, Abu Dhabi.

“Rolex makes nearly a million watches each year, but the popularity of the brand means demand vastly exceeds the supply of new watches, leading to a robust appetite for pre-owned watches - and global demand is picking up now.”

Additionally, luxury market experts have also flagged that as there weren’t enough buyers to be able to keep up with the previously-exorbitant price levels, the pre-owned Rolex prices have fallen about 20 per cent on average since its peak.

The current Rolex price correction is partly due to the negative impact of the global economic slowdown on consumer spending

- Ashique Abbas, head of sales at a luxury watch boutique

How is Rolex seen, valued as an investment?

Even at these prices, Altieri still maintains that Rolex is a “relatively affordable luxury”, especially when compared to other Swiss brands like Audemars Piguet and Patek Philippe, which routinely go for well north of $30,000 (Dh110,180).

Regardless of pricing, the Rolex’s value as an investment has outperformed other assets like gold and the stock market for the past decade, market research data shows. The sales numbers for Rolex began showing an uptick beginning in 2017, followed by an even sharper bump up in 2020.

While the price roughly tracked the average performance of the global stock market index, industry-wide market data indicates that Rolex pulled ahead in the past year. Other investments like gold and real estate (as tracked by average home prices) were nowhere close.

Gold trader gold price
The Rolex’s value as an investment has outperformed other assets like gold and the stock market for the past decade, market research data shows.

How does investing in a Rolex earn me profits?

If it’s the high costs that have stopped you from buying these luxury watches, aside from the fact that such assets often only depreciate in value as soon as it’s bought – like a brand-new car or a diamond ring, here’s how you can still turn a profit when buying a Rolex.

“In order to make a profit, the key is to spot Rolex watches which get undervalued before they get discontinued and likely be pricier to acquire if you delay your purchase by another year,” added Abbas. “So if the price of a preferred watch drops over time, most likely it’s an ideal long-term investment.”

When asked about sales were last year he said that a lot of their customers have already purchased the Rolex watches they wanted to add to their collections. However, some are still holding out and waiting for their preferred price, while few others are still debating about which models they want to purchase.

In order to make a profit, the key is to spot Rolex watches which get undervalued before they get discontinued and likely be pricier to acquire if you delay your purchase by another year

- Ashique Abbas

Buy a Rolex out of passion or as an investment?

Abbas personally feels people should buy what they love and that personal preference should be the number one determining factor when choosing a watch. However, according to Altieri, watches can often serve as investments, and the potential future value of a watch is something to consider.

“Although most buyers may have not purchased a Rolex watch as an investment piece, it’s important to factor in value retention, no matter your motivation for purchasing a luxury watch. You want to be able to cash in on a significant portion of your watch if you decide to sell it,” added Altieri.

“If a watch is in short supply, buyers would be willing to pay more to have it. The price might increase if more people want to buy it. Hard-to-find watches tend to sell for large amounts of money, and if you purchase a rare watch, it could hold or increase its value.”

Luxury watches
Paul Altieri: Rolex watches, or luxury watches in general, have been fantastic investments, and more and more watch enthusiasts and collectors are embracing this collecting category.

Bottom line

Rolex isn’t making any more vintages, such as its iconic 1969 Rolex Daytona, and even though some collectors’ watches have proven to rise in value over time after they have been discontinued, not all do.

This is why the pre-owned Rolex or luxury watch market in general is booming and prospects of such watches as an investment is not expected to blur out anytime soon.

“Rolex watches, or luxury watches in general, have been fantastic investments, and more and more watch enthusiasts and collectors are embracing this collecting category,” added Altieri.

However, Abbas partly disagrees: “Watches are primarily a passion product. If it goes up in value, consider that a bonus. But in case the value goes down, you still have something you love.

“So if you’re buying a watch as a true investment piece, it’s worth it to research and invest in a used watch that is holding its value or has provenance. This will ensure that your watch will at least hold its value, and if you’re lucky, become more valuable over time.”