Dubai: After the prices of top Swiss luxury watch brands like Rolex, Patek Philippe and Audemars Piguet soared to record levels in the years between 2020 and 2022, it became hard to find many models at retail stores. This is why enthusiasts then flocked to buy discounted second-hand watches.
While this shift in public demand caused the prices of pre-owned designer watch brands to rise over the years, this trend reversed in 2022 and the average price of Swiss timepieces dropped to their lowest level in nearly two years.
The average price of a watch sold second-hand has dropped over 30 per cent since the start of 2022, according to a luxury watch price tracker WatchCharts, with average second-hand Rolex prices falling 12 per cent, Patek Philippe prices falling 19 per cent and Audemars Piguet falling 17 per cent.
“Back in the day, you could buy any model at a good price, and there wasn’t any reason not to buy a new Rolex watch,” wrote Paul Altieri in his widely-followed blog. Altieri is one of the world's top Rolex experts and the founder of Bob’s Watches, a reputed online reseller of luxury watches.
“However, those times are long gone. Anyone who has tried to get hold of one of the watches at retail price recently will know the near impossibility of it, with some even struggling to get their names on a multi-year waiting list. This caused the increased demand for used Rolex watches.”
Anyone who has tried to get hold of one of the (luxury) watches at retail price recently will know the near impossibility of it
Are pre-owned designer watches really worth your money?
As the second-hand market is a place where you can still find pretty much any designer watch, and often for considerably lesser money, a question that remains relevant even today is how does a used timepiece compare to a brand new one in terms of investment?
“The financial aspect of buying a used Rolex versus a brand-new one isn’t always simple. While you can save a significant amount by being a watch’s second or third owner, there will be a certain level of depreciation that occurs the moment you leave the store with it for the first time,” Altieri added.
“When the watch is later sold, the savings for the next person in line can be as much as 20 per cent compared to retail. That opens up a far wider range of models to choose from, including some that may have been above budget as a brand new purchase.”
The average price of a pre-owned Rolex watch rose 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 steadying to around $10,000 (Dh36,700) today.
“While your pre-owned watch may still lose value, it will be far less and far slower than a new one. With rarity or the desirability of the piece, you could find it becomes worth more than what you paid for it,” he added. “But, that is not always the case, and it all depends entirely on the watch itself.”
Will prices of second-hand luxury watches keep dropping?
As flagged earlier, the prices for the most in-demand timepieces have fallen sharply on the pre-owned market after a surge in 2021. The WatchCharts Overall Market Index, which tracks the 60 most traded watches by value from the top 10 brands, fell about 5 per cent in the first half of 2023.
Luxury market experts have flagged how higher interest rates worldwide have spurred investors to scale back luxury spending and boost savings. The downturn in the crypto market, also advanced by rate rises, has also hurt costs of designer watches, with the priciest pieces seeing the most declines.
“Pre-owned prices fell sharply on the pre-owned market amid global economic worries and the crash in cryptocurrencies, and prices for second-hand Rolex, Patek Philippe and Audemars Piguet watches will keep falling as supply remains high,” noted analysts at US-based lending giant Morgan Stanley.
After a price hike was seen among popular family-owned Swiss watch brands, a price downturn recorded over the last year was stark for certain iconic models like Rolex’s Daytona, Patek Philippe’s Nautilus and Audemars Piguet’s Royal Oak, according to Chrono24, a luxury-watch online retailer.
However, this price drop isn’t observed with all models, and costs are still high from three years ago. The Rolex Cosmograph Daytona 116500 model, for example, is now listed at $29,000 (Dh106,519), double its 2020 price, and a Patek Philippe Nautilus 5711 Stainless Steel model demands $103,357 (Dh379,638), on average, a threefold increase from $34,890 (Dh128,153) three years ago.
Buying a used luxury watch now allows you to get a great deal since you are purchasing the watch after the recent price depreciation
Verdict: Is it time to buy pre-owned luxury watches?
“The relatively lower prices does present a buying opportunity for a new generation of shoppers and collectors. Millennials, in particular, are developing an appetite for luxury watches,” opined Ashique Abbas, head of sales at a luxury watch boutique in Abu Dhabi.
A recent report by US-based global market research firm BCG found that over 54 per cent of millennial buyers said they had increased their spending on luxury watches in the past two years, according to a survey of over 10,000 potential buyers worldwide - indicative of how preferences towards pre-loved luxury watches are now changing.
“Buying a used luxury watch now allows you to get a great deal since you are purchasing the watch after the recent price depreciation," opined Abbas, while reiterating that Rolex, Patek Philippe, Audemars Piguet, Jaeger-LeCoultre, Omega, and Cartier are among the watch brands that consistently command strong resale prices.
Keep in mind: When second-hand watches make it to the shelves, they are in such demand, they get snapped up quickly and that is when such pieces have substantial premiums added to the retail price, cautioned Altieri. "However, as a general rule, a used luxury watch is still less expensive than a new one."
"The pre-owned market can be difficult to navigate if you don’t take steps to look after yourself and your money. Unscrupulous sellers are everywhere, and there are countless watches out there that are either completely fake or otherwise not completely authentic as advertised," said Altieri.
"Models with incorrect (and often undisclosed) replacement components (known as “Frankenwatches”) can be devilishly difficult to spot and are commonly worth a fraction of the price of an all-original model. However, sticking to dealers with reputations and guarantees negates this problem."