HONG KONG – More signs are emerging that the secondhand luxury watch market is finding its footing, after prices surged and then tumbled earlier this year.
An index for Rolex resale prices at WatchCharts, a consultancy, fell 1.84 per cent in early September from the prior month, a slower place of decline following a summer slump of at least twice that rate.
Meanwhile, the Subdial50 index, which tracks prices of the 50 most-traded luxury watches, ticked up 1.2 per cent in the 30 days prior to Sept 7, “hinting at a bottoming out of prices in the world’s most popular luxury watch references,” the company said in a post published Wednesday.
The index tracks references for watches such as the Rolex Daytona and Datejust, as well as Patek Philippe Nautilus and an Audemars Piguet Royal Oak.
Luxury timepieces have been on a wild ride this year, particularly in the closely tracked secondary market. While there is wide variation of price performance in the market, valuations for some of the most coveted models slumped in the late spring after hitting a peak sometime in March or April, depending on which models are tracked.
The downturn had been linked by some to a collapse in cryptocurrency prices, though others thought different factors were in play, such as dealers trying to get rid of overstock.
Gains in other asset classes, stimulus cash and speculation fueled what some were calling a bling boom early this year, with new buyers looking for alternative investments. Demand for the most sought-after watch resales was high, sending prices soaring. In March, the WatchCharts Rolex index was up 35 per cent over the same month the previous year.
“It was almost a sense of euphoria in the market,” said Austen Chu, founder and CEO of online watch platform Wristcheck.
Then came the fall. In the steepest month-over-month drop, the WatchCharts Rolex index fell 5.9 per cent in June, followed by a 3.5 per cent decline in July and 5.1% drop in August.
“Flippers and day traders who’d been told you couldn’t lose money in watches came with little underlying passion and found themselves burnt when prices began to fall,” Subdial said in the post.
The price slide was largely attributed to dealers and individual owners trying to sell more watches, rather than fear from buyers. “Consumer demand has been resilient,” Kathryn Parker, luxury research analyst at Jefferies, said in an interview. BLOOMBERG