Dhe prices for luxury watches from Rolex, Patek Philippe, Audemars Piguet have increased by an average of 20 percent per year since 2018, significantly outperforming the US stock market. This is mainly due to the booming market for used chronometers. A recent study shows that. The leading index S&P 500 achieved an average return of 8 percent per year from August 2018 to January 2023, while a basket of used models from the three top Swiss brands grew more than twice as fast, shows the report published jointly by the Boston Consulting Group and WatchBox created a platform for used luxury watches.
The prices of individual models – such as the Rolex Daytona, Patek Nautilus and AP Royal Oaks – have fallen by up to a third from their peak at the beginning of 2022. A basket of timepieces from independent watchmakers such as FP Journe, H. Moser & Cie and De Bethune saw their prices rise 15 percent over the same period. The report recommends luxury watches as an alternative asset class to stocks and bonds, but also to more remote assets like art and wine.
New hobby for wealthy customers
Of course, stocks have outperformed watches over a longer period of time. The S&P 500 returned an average of 12 percent between 2012 and 2022, while the basket of top three watchmakers returned 7 percent. Price increases in the used watch market have accelerated sharply during the pandemic. Affluent Millennials and Generation Z consumers discovered the expensive new hobby of Swiss watches during the lockdown. Crypto assets also correlated with used watch prices.
“Value and transparency are the drivers of the secondary market, and that drove liquidity,” said Sarah Willersdorf, a partner at BCG in New York, in an interview. More than 60 percent of used watches are bought online – for new pieces it is only 15 percent. While the majority of buyers are still men, Willersdorf is seeing a rapidly growing number of female and younger collectors.
Market volume of 24 billion dollars
Based in Philadelphia, WatchBox is one of the world’s largest sellers of pre-owned watches. His financiers include former basketball star Michael Jordan and activist investor Bill Ackman. Boston Consulting and WatchBox co-funded market research for the report.
The market for pre-owned luxury watches grew to $24 billion in 2022 – almost half the market for new watches, which is worth $55 billion. Boston Consulting expects further annual growth of 9 percent to $35 billion through 2026. LuxeConsult, an independent consultancy, recently predicted that the pre-owned market will overtake that for new watches by 2033, when it could hit $85 billion.
The sector, often dismissed disparagingly as the “grey market”, received a significant boost in December when Rolex announced it would offer authenticity testing of pre-owned watches for resale through its network of authorized dealers.