Rolex watches a better investment than stocks, gold or real estate if you bought a decade ago, and sellers believe they’ll continue to deliver value
In March, the price of a second-hand Rolex Daytona watch peaked at US$48,500. It’s come a little closer to Earth since, and is now around US$30,000 on the secondary market, according to WatchCharts.
Prices of Rolex watches on the secondary market skyrocketed during the first several months of 2022, before dipping a bit as the year ended. But the Rolex’s value as an investment has outperformed other assets like gold and the stock market for the past decade.
On Chrono24, a popular luxury-watch marketplace whose backers include French billionaire Bernard Arnault – the richest man in the world in 2022, ahead of Elon Musk – approximately 25 per cent of site searches are Rolex-related.
Around 14 per cent of the watches the platform sells are Rolexes, and four-fifths of them are pre-owned.
How Rolex became the top luxury watch brand in the world
How Rolex became the top luxury watch brand in the world
“We’re still seeing, for most of the watches, prices above January this year,” said Tim Stracke, the founder of Chrono24, “but not as crazy as they were in March and April.”
According to Chrono24’s data, the dramatic increase in prices has mainly affected what Stracke calls the “glorious three” brands: Rolex, Patek Philippe, and Audemars Piguet.
Other watch brands, however, have only seen what Stracke calls a “very, very stable, slow but steady increase over time”.
Back in February, Paul Altieri, the chief executive of online watch resale marketplace Bob’s Watches, said: “Rolexes have been a good investment over the years, but not like the last five.”
For the past decade, Bob’s has been buying and selling thousands of watches using a consistent pricing strategy that has given the company unique insights into the real market value of every Rolex model.
One of the reasons for the swift rise in prices of Rolex watches in recent years is supply. Rolex reportedly makes about 800,000 watches each year, but the popularity of the brand means demand vastly exceeds the supply of new ones, leading to a robust secondary market for pre-owned watches.
Indeed, the sales numbers for Rolex on average show an uptick beginning in 2017, followed by an even sharper bump up in 2020. As of February 2022, the average Rolex price is more than US$13,000 – nearly three times the 2011 average of US$5,000.
“Before you leave the store it’s worth double or triple what you paid,” Altieri said.
And that’s if you can even find an authorised dealer to sell it to you.
“People have waited a year or two for their name to come up on the buyers’ list – they’re not going to flip it,” Altieri said.
The limited supply is probably among the reasons that Rolex launched its own certified pre-owned programme in December.
“The new programme makes it possible to purchase pre-owned watches that the brand itself has certified and guaranteed. Its aim is to bring added value to the existing supply of pre-owned Rolex watches. Because when these watches change hands, their authenticity must be attestable at the time of resale by the official retailers,” Rolex said in announcing the programme.
Hong Kong luxury Swiss watch sales face an uncertain future
Hong Kong luxury Swiss watch sales face an uncertain future
The current total value of the pre-owned luxury watch market is estimated to be US$20 billion, according to a report from McKinsey, and is expected to top US$29 billion by 2025.
Stracke expects that inflation will continue to drive up demand and prices for the “glorious three” in the coming year.
“A lot of users buy a watch to not only enjoy the perfect craftsmanship, and the beauty of the watch, and the status of the brand, but also the stability of value,” he said. “We have to call it not only a piece of jewellery, and a luxury category, but also the real asset class.”
