Investors in Swiss luxury watches, particularly high-end brands, should brace for ongoing price declines in the secondhand market, according to recent data. This trend is particularly promising for those interested in Rolex watches, which have historically suffered from severe supply shortages and extended waitlists.
Morgan Stanley’s latest client note highlights that the WatchCharts Overall Market Index, which tracks the value of 60 luxury Swiss watches across 10 brands in the secondhand market, has dropped for the ninth consecutive quarter as of the second quarter ending June 30. Since the pandemic peak in early 2022, prices have consistently fallen, with a 2.1% decrease from the first quarter of 2024 and a 1.2% year-over-year drop.
“The decline in the secondary market is widespread, with only a few brands showing positive performance in the second quarter,” noted Morgan Stanley analysts.
The investment firm anticipates that this downward trend in prices will persist throughout the year.
Year-over-year analysis reveals that only five brands, including Montblanc (+2.4%) and Hamilton (+2.2%), experienced price increases. Conversely, premium brands such as A. Lange & Söhne (-5.3%), Breitling (-5.9%), Omega (-6.8%), Rolex (-7.2%), and Audemars Piguet (-12.5%) faced the most significant declines.
The secondary market’s performance has broader implications, influencing primary market prices where new watches are sold by authorized dealers (ADs).
A notable trend in the report is the impact on Rolex, which had previously seemed insulated from market pressures. Rolex watch “flippers”—dealers who buy new watches to resell at higher prices—are encountering challenges. This shift is contributing to an increase in the availability of new Rolex watches at the AD level.
Morgan Stanley’s analysis of Rolex market dynamics focused on two factors: the size of the “gray market,” which includes current-production watches listed as new on the secondary market, and the wait times for Rolex models at authorized dealers.
The analysis shows a decrease in the number of Rolex watches on the gray market, attributed to rising retail prices and falling resale values making speculation less profitable. Additionally, improved wait times for popular Rolex models, such as the Submariner, GMT-Master II, and Explorer, indicate a reduction in demand for speculative purchases.
“Improved availability on the primary market and waning demand for speculative purchases suggest a shift in Rolex market dynamics,” said Charles Tian, founder and CEO of WatchCharts, in an interview with Yahoo Finance.
As a result, consumers may find increased availability of Rolex watches at authorized dealers, potentially making it easier to purchase coveted models like the 2024 Rolex Submariner.
