From 2021 up until the first quarter of 2022, prices of some of the most popular Rolex, Patek Philippe and Audemars Piguet watches surged to a high on the secondary market. However, prices have since dropped by about 15 to 20 per cent from their peak and, according to a report by investment bank Morgan Stanley, will continue to fall further.
It is worth noting that the most sought-after models from Rolex, Patek Philippe and Audemars Piguet account for a whopping 71 per cent of the total traded value of the secondary luxury watch market.
To demonstrate this drop in prices, indexes of the financial performance of watches on the secondary market by WatchCharts show that popular models like the Rolex Daytona have fallen by about 23 percent from its highest in March 2022.
Similarly, WatchChart indexes reveal Patek Philippe Nautilus and Audemars Piguet Royal Oak resale prices have dropped by about 18 and 15 per cent respectively. Analysts at Morgan Stanley attribute the drop to a supply glut brought about by secondhand watch dealers and collectors offloading their stocks.
What does this mean for watch buyers? Dr Bernard Cheong, founder of Lifeline Medical Group and one of Singapore's most prominent watch collectors notes the importance of first considering the nuances when interpreting the ups and downs of the market. In his opinion, the 15 to 20 per cent drop in resale prices is not significant.
“For one, these numbers are measured on several moving parameters of these brands,” he says. “Statistically, that is not reflective enough to inform. One may need to examine how these trends of up and down were delivered. The grey buying market changes the parameters once there is a small fall in a few highly sought-after models—and it is often cherry-picked—then projected to rarely traded models, mainly diamond Daytonas and diamond GMT Masters. These fell from US$330,000 (SG$467,000) to US$120,000 (SG$171,000) but there are less than six pieces made globally so these are low volume, high risk, no intrinsic value pieces.”
Cheong suggests looking at more commonly traded models to better understand the market. “For the high volume steel or gold pieces—about 10,000 are traded per annum on the secondary market—there was no drop in prices from 2020 to 2022. If I look at a more specific index, like the Rolex Steel Submariner with ceramic bezel, the fall in price is zero. Same with the steel Patek Philippe Nautilus with a white dial made between 2012 and 2019—the fall is also zero.”