The luxury watch market is going through tumultuous times. A recent study reveals a continued decline in prices on the secondary market. Discover the trends shaping the future of high-end watchmaking and the opportunities available to savvy enthusiasts.
The end of a golden era for luxury watches?
The world of luxury watches is undergoing a major transformation. According to a report by Morgan Stanley in collaboration with WatchCharts, the secondary market for high-end Swiss watches saw a 2.1% price decline in the second quarter of 2024. This trend is part of a broader movement, marking the ninth consecutive quarter of decline since the second quarter of 2022.
The figures speak for themselves: the global WatchCharts market index shows an annual performance of -9.4%. The three major emblematic brands of the sector have not been spared:
This general downward trend affects almost all brands whose average market price exceeds €3,000. A strong signal that demonstrates the challenges faced by industry players.
The causes of a weak market
Several factors explain this unprecedented situation for the luxury watch sector:
1. The end of speculation: The time for speculative purchases seems to be over. Waiting times for some iconic models have been significantly reduced. For example, the wait for a Rolex Submariner has gone from 105 days in 2023 to just 68 days in 2024.
2. A plethora of supply: The stock available on the secondary market for the three major brands (Rolex, Patek Philippe, Audemars Piguet) remains significantly higher than 2021 levels. This overabundance reflects the after-effects left by the bursting of the speculative bubble in March 2022.
3. Falling absorption rates: Watches are taking longer and longer to find buyers on the secondary market. For Rolex, the average sales time has increased from 18 days in 2021 to 67 days in the first half of 2024.
4. A gloomy economic context: The disappointing results of large groups such as Swatch and Richemont illustrate the difficulties of the sector, particularly on the Chinese market.
Opportunities for enthusiasts
Despite this difficult context, opportunities are emerging for enlightened amateurs:
1. More affordable prices: The continued drop in prices on the secondary market makes some prestigious models more affordable than before.
2. Expanded choice: Increased available inventory provides greater choice to potential buyers.
3. Development of the certified pre-owned market: The Rolex Certified Pre-Owned program continues to expand, with approximately 5,500 watches available from 61 authorized dealers worldwide.
4. Future innovations: Faced with these challenges, brands will have to redouble their efforts to attract customers, opening the way to potential technical and aesthetic innovations.
5. A return to fundamentals: This period could mark a refocusing on the intrinsic value of watches rather than on their speculative potential.
The luxury watch market is going through a period of turbulence that is reshuffling the cards in the sector. While caution remains the order of the day for buyers on the secondary market, this situation also offers new perspectives for enthusiasts. Time will tell whether this downward trend marks the end of a cycle or the beginning of a new era for high-end watchmaking.
SRQ Backlot