The used luxury watch market is showing signs of recovery as prices have marginally increased, marking a shift after a prolonged period of decline. The Bloomberg Subdial Watch Index, which monitors the 50 most traded watch models on the secondary market, registered a 0.1 percent rise in September, primarily driven by Patek Philippe’s impressive performance.
Patek Philippe, a prestigious name in the watch industry, saw its pre-owned watch prices rise by 0.9 percent during the month. This growth can be attributed to the popularity of specific models, particularly the Nautilus 5711 with a blue dial, which experienced a notable price increase of over 2 percent. This model’s appeal stems not only from its elegant design but also from its status as a discontinued product, making it a sought-after piece among collectors.
The recent uptick in watch prices coincides with the U.S. Federal Reserve’s decision to reduce interest rates for the first time in more than four years. There appears to be a consistent pattern where watch prices have historically moved opposite to interest rates, creating a unique interplay between economic indicators and luxury goods pricing.
Following an unprecedented surge in price after pandemic lockdowns were lifted, the luxury watch market experienced a significant downturn starting in March 2022. This was fueled by a series of rate hikes aimed at curbing inflation, which inevitably affected consumer spending across various sectors, including luxury goods.
While Patek Philippe’s gains were substantial, other brands like Tudor, owned by Rolex SA, also reported an increase, with prices rising by over 0.8 percent. In contrast, the prices for luxury watch brands such as Rolex, Breitling, Cartier, and Audemars Piguet remained stable or experienced slight declines, suggesting a mixed sentiment in the broader luxury watch market.
The Bloomberg Subdial Watch Index had shown modest improvements in August, yet it remains 1.9 percent lower year-to-date. Popular Rolex models, such as the GMT-Master II, affectionately known as the ‘Pepsi’, and the black-dial Daytona chronograph, saw a price drop of about 1% in September. However, the ‘Pepsi’ has gained approximately 4 percent over the last year, demonstrating a fluctuating yet promising outlook for this prized timepiece.
Sales trends further illuminate the evolving landscape of the luxury watch market. Watches of Switzerland reported a remarkable doubling of used watch sales in its latest fourth quarter compared to the previous year, establishing the segment as its second-largest revenue source. This uplift in sales aligns with the ongoing market stabilization, positioning the pre-owned watch market as a critical player within the luxury sector.
In summary, the recent data reflects a cautious optimism in the used luxury watch market, centered on iconic brands like Patek Philippe while highlighting broader consumer trends and economic factors influencing market behavior. As prices begin to stabilize, stakeholders from collectors to retailers may find strategic opportunities to engage with this revitalizing luxury market segment.
