17.01.2024
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In recent years, high-end timepieces have increasingly become a focus for savvy investors, marking a shift in their role from luxury accessories to valuable collectible items. Prestigious brands such as Rolex, Audemars Piguet, Patek Philippe and Vacheron Constantin are at the forefront of this shift. These brands are renowned not just for their long-standing heritage and precision craftsmanship, but also for their unique appeal — distinctive designs, rare models, and the legacy embodied by each company.
At Timeless Investments, we offer fractional ownership of selected high-quality luxury watches to make this exclusive asset class accessible to all. Invest from as little as €50* per fraction in unique assets and participate in their performance.
This article, a part of our Timeless Guide series, is designed to enlighten you about the world of luxury watch investments, helping you navigate and make informed decisions in this exclusive sector. You can find other articles from the series here. Learn more about premium assets, and continue your investment journey with confidence, expertise and insight.
Rolex Datejust Ref. 1601 Obsidian Dial
Market value is 11% above our drop price
Investing in luxury watches presents an appealing alternative to conventional investments like stocks or real estate, combining the practicality of tangible assets with the sophistication of high-end collectibles. The luxury watch market, projected to reach USD 73.62 billion by 2032, offers stable and potentially lucrative returns. Unlike volatile financial markets, luxury watches demonstrate resilience, maintaining their value even during economic downturns.
The key to their enduring appeal lies in their rarity, brand reputation, craftsmanship, and global demand from collectors and enthusiasts, all of which contribute to their value appreciation.
Particularly notable is the robust secondary market for luxury watches, given that nearly 95% of watch models are no longer in production. Rare models from top brands like Rolex and Patek Philippe consistently sell for prices significantly higher than their retail value. In 2021, pre-owned watch sales reached $22 billion, accounting for nearly one-third of the overall $75 billion luxury watch market. The segment has been growing faster than the firsthand market, and the trend is likely to continue, highlighting the potential for considerable returns on investment. Notable auction results further highlight the investment potential of luxury watches. In 2021, Patek Philippe Grandmaster Chime Ref. 6300A-010 fetched $31 million, becoming the most expensive watch ever sold at auction. This result underscores the exceptional value that can be realised through the acquisition of rare and sought-after luxury watches.
In recent times, the luxury watch market has shown consistent growth despite some occasional challenges, further highlighting its appeal as an investment option.
In 2023, the market went from an evaluation of $30.58 billion the year prior to a value of approximately $34.17 billion. As reported in the Knight Frank Report (Q2, 2023) The AMR Watch index also went up by +10%, with individual luxury brands such as Cartier, Rolex, and Patek-Philippe also seeing price appreciation (+12%, +10% and +7% respectively).
This market evolution can be attributed to increasing consumer inclination towards premium watches. The demand is particularly strong in developing countries, where rising disposable incomes contribute to luxury watches being sought after as status symbols.
However, the market has also been facing some challenges. Increased interest rates, inflation, and global events have led to a softening of the luxury watch market, especially when compared to the beneficial investment conditions of the pandemic. Some luxury watch dealers have been impacted by these economic pressures, even resulting in a decrease of the inventory being sold.
Nonetheless, the preowned luxury watch market has still seen notably favourable trends. High-demand models like the Patek Philippe Nautilus and Rolex Daytona have been fetching prices up to 200% higher than their original retail values in the secondhand market. Over the past 10 years, some models had an even more dramatic price increase. For example, Rolex Daytona Ref. 6241 with the John Player Special Dial had an appreciation of +571%. This trend is largely driven by the scarcity of new watches and a surge in demand, exacerbated by production constraints during the pandemic.
The luxury watch market is extremely diverse, encompassing a range of styles and functionalities that cater to different preferences and needs. We have compiled some of the sub-type distinctions in here to help you navigate this complex sector:
Dress Watches: Typically characterised by their classic and formal design, dress watches are often paired with leather straps. They emphasise elegance and simplicity, making them suitable for formal events and business settings.
Sports (-steel) Watches: These watches are designed with a sporty aesthetic and are commonly found on integrated, steel bracelets. They are built for durability and functionality, often featuring additional resistance to elements like water and shock, making them ideal for active lifestyles.
Gold / Luxury (Sports) Watches: This category includes watches crafted in 18k gold (rose, yellow, white) and often features an integrated bracelet made from the same high-end material. These watches combine the sportiness of a sports watch with the luxury and prestige of a precious metal.
Investing in luxury watches involves considering several key factors that contribute to their long-term value and potential return on investment. These include:
Investing in luxury watches brings potential high returns but requires careful navigation of challenges like verifying authenticity and managing upkeep. Understanding the market’s nuances, including the historical value of models and current trends, is crucial.
At Timeless, we offer a solution to these challenges through a fractional ownership model. This approach allows investors to own fractions of valuable timepieces, thereby reducing direct responsibilities while benefiting from potential value appreciation.
Our expertise in market dynamics and collector preferences equips us to effectively manage the intricacies of luxury watch investment, providing a strategic approach for those looking to invest in this sophisticated market.
Explore our curated luxury asset selection to enhance and diversify your investment portfolio.
The global luxury watch market is expected to grow at a compound annual growth rate (CAGR) of 4.90% between 2024 and 2032, eventually reaching around USD 73.62 billion by 2032. This growth trajectory indicates a robust and expanding market that is poised for exciting developments.
One notable trend is the increased focus on sustainability. Consumers are becoming more conscious of the environmental impact and ethical implications of their purchases, leading watchmakers to prioritise eco-friendly materials and sustainable manufacturing processes.
At the same time, the market is also witnessing a resurgence of interest in classic and vintage styles. Many brands are revisiting their archives to reissue or draw inspiration from iconic models of the past, blending traditional aesthetics with modern technology. . Finally, collaborations between watch brands and entities outside the traditional watchmaking sphere are becoming more common. These collaborations are not just limited to fashion but are extending to other fields like sports, entertainment, and technology, creating unique and exciting timepieces that appeal to a wider audience.
You can learn more about luxury brand collaborations here.
These trends collectively point towards a dynamic and evolving luxury watch market in 2024, characterised by a blend of sustainability, innovation, reverence for tradition, and collaborative creativity.
The luxury watch market has evolved from a symbol of opulence to a lucrative investment avenue. With the global market projected to grow significantly by 2032, high-end timepieces from prestigious brands like Rolex and Patek Philippe are not only treasured for their craftsmanship but also for their investment potential.
This market’s resilience, even amidst economic fluctuations, highlights its stability compared to traditional investment forms. As we look ahead, the luxury watch industry promises a dynamic future, balancing innovation with sustainability, and tradition with modernity. For investors and enthusiasts alike, understanding this market’s intricacies is key to navigating its opportunities, ensuring informed and strategic decisions in a sector where timelessness and value converge.
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