Luxury watches cost crashes: Rolex and Patek Philippe prices hit two-year lows, here's why

Prices of high-end Rolex and Patek Philippe luxury watches have reached a new low in two years. According to Bloomberg Subdial Index, which tracks the pricing for the 50 most traded watches by value, witnessed a 1.8% drop in October, hitting its lowest point since 2021. Over the last 24 months, prices have fallen by about 18%.

Pandemic-Era Enthusiasm Decline:

The declining demand in the secondary market is attributed to a waning trend in pandemic-era enthusiasm for luxury items. This shift is evident in major brands like LVMH and Gucci, which experienced a slowdown in the previous quarter. The slump is now extending to luxury timepieces, with Rolex and Patek Philippe prices seeing a considerable decrease.

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Christy Davis, co-founder of London-based Subdial, noted growing downward pressure in the market, leading to a potential further decline in prices. As a consequence, the average number of days to sell pre-owned watches has increased by 8% since August.

This trend aligns with observations from significant luxury conglomerates, such as LVMH and Kering, indicating a correction in demand compared to the heightened consumer spending during the COVID-19 period. Richemont, the owner of luxury brand Cartier, also reported sales missing analyst expectations, citing factors like inflationary pressure and geopolitical tensions affecting customer sentiment.

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Factors Impacting Sales:

The decline in secondhand luxury watch prices marks a stark contrast to the pandemic peak when demand for pre-owned Rolex and Audemars Piguet watches outpaced supply. However, economic pressures, including high-interest rates and downturns in stock markets and cryptocurrencies, have contributed to a downturn in the watch market over the past year.

Despite recent pricing trends, luxury watches remain resilient as a time-tested store of value. A Boston Consulting Group report highlighted that second-hand watches are sought after as alternate investments, historically performing well relative to stocks, even during economic recessions. Although prices have declined in 2022, luxury watch prices have demonstrated resilience and the potential for recovery.