Luxury Swiss watches, including renowned brands like Rolex, Patek Philippe, and Audemars Piguet, are experiencing a continued drop in secondhand market prices, reaching a new two-year low, according to Subdial, a watch industry data provider. The Bloomberg Subdial Watch Index, tracking the 50 most coveted watches by value in the secondhand market, reported a 3% decrease in November, marking a 10% decline from the previous year, with an index value of £26,912 or $33,740.
Despite the downward trend, this might be the opportune moment for enthusiasts to acquire their coveted “grail watch” before the market rebounds, especially with the holiday season approaching.
Among the noteworthy observations, the Rolex Submariner with a green bezel, known as the “Kermit,” recorded the most significant decline at 4.6%, while the yellow gold Rolex Day Date exhibited a rare gain of 1.3%. Although Subdial acknowledges a 40% decline in the same period last year, a 10% decrease this year remains a substantial market shift.
Subdial’s insights parallel the broader market for new Swiss watches, which, despite a robust performance in 2023, experienced a decline in exports in July—the first in over two years. However, Subdial sees a silver lining, emphasizing that despite falling prices in the secondhand market, transaction volumes remain steady.
The decline in the luxury watch market can be traced back to the peak in April 2022 when factors like low supply, social media influence, the surge in cryptocurrencies, and a heightened sense of urgency during the pandemic led to frenzied buying globally, causing the Bloomberg Subdial Index to drop by 42%.
Subdial identifies a potential positive catalyst for the market: the future interest rate environment. The correlation between the decline in the watch market and the Federal Reserve’s rate hikes is notable. With rate hikes likely behind us, Subdial expresses optimism about the market’s future.
While traders are already factoring in a potential Fed rate cut in May 2024, signaling a prolonged recovery for watch dealers, potential buyers may find this period advantageous. Checking with local Rolex dealers, even if certain models are seemingly sold out, might yield unexpected opportunities—perhaps a two-tone Rolex Explorer in stock due to a buyer backing out.
