State of the Luxury Watch Market

Today we’re looking at the state of the luxury watch market, with a guest post from watch expert Marc Montagne.

When the crypto bubble popped in late 2021, it dragged the fine watch market along with it. Prices have been steadily falling for two straight years.

But today, prices seem to be stabilizing, and some are calling a bottom.

There are three questions we want to answer:

  1. Has the luxury watch market bottomed?
  2. Is now a good time to jump back in?
  3. And if so, what’s the best way to do it?

Let’s go 👇

Note: Marc is a watch expert and an avid collector. With 10+ years in the watch industry (Vacheron Constantin, Jaeger-LeCoultre), he founded WatchAuctionHQ, which was acquired by EveryWatch). Marc is also the author of the book ​Invest in Watches: The Art of Watch Collecting​. You can follow Marc on ​Instagram​, ​LinkedIn​, ​Twitter​ and at ​marcmontagne.com​

Luxury watches vs crypto

Much has been written about the ​connection​ between luxury watches and cryptocurrencies.

During Covid lockdowns, people shifted consumption from experiences to physical products. Both saw a surge in prices as governments injected unprecedented amounts of cash into the economy and stimmy checks hit the mail.

Crypto winners invested their newfound wealth into luxury watches. Demand quickly overcame the supply capacities of watch manufacturers, creating a bubble in secondhand watch prices.

As a result, waiting lists for popular models dramatically increased. It wasn’t rare to be quoted a waiting time of 10 years. If you didn’t want to wait, the secondary market (second hand dealers, marketplaces such as Chrono24, and auctions) offered an alternative avenue, but at a huge multiple.

Covid was a golden age for watch-flippers. In-demand classics were trading for 2-3x the retail price immediately after hitting the secondary market. For example, this Audemars Piguet ref. 16202 sold for twice its retail price.

This only amplified the already existing tension in the industry. While specialized luxury watch funds have existed since the early 2010s, watches were no longer obscure alternative investments. They went mainstream, with tons of coverage in the press and ​books.​

​Record auction prices​, breakthrough ​technological advances​, ​celebrity owners​, and ​collaborations​ also helped luxury watches go mainstream.

Did you know that Jay-Z’s watch collection ​is worth millions​? Here he’s wearing a gorgeous Audemars Piguet Royal Oak Perpetual Calendar in yellow gold. Watches follow cycles, and gold is hot now, as it was up until the 90s!

Jay-Z isn’t the only celebrity who appreciates watches. Recently, Sylvester Stallone made the news when he infuriated Patek Phillipe’s president for ​reselling a very exclusive piece​.

The absolute peak came at the end of the 2021 bull market, and the start of the 2022 crypto recession. As expected, traders were cashing out at the peak and moving on to luxury goods.

Now that’s what I call a bubble.

The decoupling

Since Covid, secondary luxury watch prices have moved broadly in line with Bitcoin prices. But the correlation doesn’t line up perfectly.

For example, watch prices peaked in May 2022, by which time Bitcoin had already fallen 70% from its peak.

As of today, the two asset classes have become seriously decoupled.

Interestingly, we can see that this decoupling occurred roughly around the same time the drumbeat Bitcoin spot ETF drumbeat started getting loud.

The pandemic-era price correlation between Bitcoin and luxury watches has now officially broken. Chart courtesy of ​Coindesk​

If there’s one thing that Bitcoin and luxury goods share, it’s scarcity.

Before Bitcoin ETF optimism took hold of the crypto market in the second half of 2023, the prices of Bitcoin and luxury watches exhibited a positive correlation.

But it’s safe to say that correlation is entirely broken.

Today, the price of BTC is high, while watch prices are still low. Recent crypto gains have not (yet?) made their way into the luxury watch secondary market.

Will this decoupling last?

Signs of stability

The luxury watch market has experienced a very challenging period over the past few years, with average prices for top brands like Rolex and Omega down 30.3% over the past 24 months:

However, the resurgence of crypto provides some hope for recovery.

You may have noticed Bitcoin is up 157% over the past 6 months:

The hope is that, with such massive gains, the wealthy crypto market participants may soon again be willing to ​direct a portion of their new riches​ into rare timepieces.

Remember that the market dynamics have changed as well. Many people got hooked on watch collecting during Covid, and presumably, a larger percentage of the population is now interested in the hobby compared to pre-pandemic.

The “​watchfluencers​” haven’t slowed down either. Lots of them are annoying, but some are great! ​Teddy Baldassarre​ has been putting out some well-produced, in-depth stuff lately:

Some outlets are reporting that the market ​has now stabilized​, or even corrected.

We can see hints of this in the data:

Is the bottom in? Chart courtesy of ​​​Bloomberg Subdial Index​​

Based on the Covid-era correlation, luxury watch market prices would be about 4-6 months behind crypto markets.

The most recent crypto run-up began in early February. So if luxury watch prices are going to rebound, we’d expect that to start happening very soon…

Keep a close eye on this index. đź‘€

Rolex advertising

Longtime watch advertising pioneer Rolex has increased its visibility even further.

If you’ve watched tennis in the past few years, you’ve probably noticed Rolex’s presence on the tennis court — especially the ​partnership with Roger Federer​.

Lately Rolex has made a push into all sorts of new channels, including movie theaters.

Since the Oscars, moviegoers have seen Rolex’s ​Every Hero Needs an Ally​ campaign before the movie starts, further cementing the brand’s cultural relevance.

Watching the auctions

All the biggest watch dealers and collectors buy goods at watch auctions.

Each year, there are hundreds of millions of dollars worth of watches that go under the hammer. Similar to other markets, auctions are where most of the huge deals are made. Less expert eyes are usually watching.

Legendary auctioneer ​Aurel Bacs​, ready to hammer another watch!

The interesting part to me (and what everyone forgets) is that auctions aren’t limited to the high-end! While there are watches fetching millions, the hammer price on others only reaches a few hundred bucks.

I’ve written about ​how watch auctions work​ in the past. Auctions are worth the effort, but the process is daunting if you don’t have experience.

A tool like ​EveryWatch​ will be extremely useful as it will allow you to see the price of all watches available at dealers, marketplaces or auctions, including past sales results, while also giving you the possibility to set alerts whenever a specific piece is available on the market.

These alerts can be extremely granular; you could, for example, be alerted when a specific reference with a specific combination of material/dial colour hits the market in your country under a given price!

By the way, if you’re an aspiring collector and want to enter this space like a pro, consider taking my upcoming ​watch auction course​. It’s being released next month. (Mention you came from Alts and I’ll give you 40% off.)

The 2023 watch market

In 2023, watch auction market sales were up 6% YoY.

However, according to the platform ​EveryWatch​, the total number of lots increased 44%.

Chart courtesy of ​Everywatch​ — the world’s largest watch database.

This data tells us that prices have gone down, but there has been a lot of activity in the market. This is a great sign!

Trends to watch

The biggest trend of the year has been the shift away from sports watches (Starting at the Rolex Daytona up to the Audemars Piguet Royal Oak), and towards smaller, dressier watches (such as Cartier, which has been ​quite hot​ for a few years.)

As these sports pieces are traditionally made of stainless steel, we have also seen a shift from stainless steel watches towards more precious metals, specifically yellow gold.

Collectors are also looking for watches with high value for money. Piaget has become increasingly popular as they’re surfing that trend.

Collaborations have been ramping up too, like the ​OMEGA x Swatch​ collab.

The top 5 watch auction houses

Christie’s was the biggest watch seller in 2023.

Below are 2023’s top 5 auction houses by volume & value.

  1. ​Christie’s​ — $236m in sales, across 2,679 lots
  2. ​Phillips Bacs & Russo​ $217m, 1,582 lots
  3. ​Sotheby’s​ $155m, 4,002 lots
  4. ​Monaco Legend Group​ $47m, 539 lots
  5. ​Antiquorum​ $37m, 2,233 lots.
Christie’s had the highest watch auction sales in 2023, but Phillips had the highest avg. sale price.

The top 5 watch sales

1) Patek Philippe World Time 2523J ($8.5m)

The top watch auction goes the Patek Philippe World Time 2523J, which sold for $8.5m at Christie’s spring Hong Kong auction.

This extremely rare watch, with its enamel “North America map” for which only three examples are known, was meant to set a record as a previous model had already crossed the million-dollar mark back in the 1990s.

2) Patek Philippe Calatrava 96QL Emperor ($6.2m)

This specific example was the former property of ​Aisin-Gioro Puyi​, the last Emperor of China’s Qing Dynasty (who died in 1967)

Image courtesy of ​SJX Watches​

Interestingly, before going out for auctions, it was previously unknown. Even if we put the provenance aside, it is an exceedingly rare watch as only 4 other pieces were produced in platinum.

Surely this Emperor deserved a proper watch!

3) Patek Philippe Sky Moon Tourbillon ($5.8m)

Patek Philippe trusted the first three positions of this ranking, ending up with this reference 6002G-001, which also set the record for the most expensive wristwatch to have ever been sold through online auctions.

This piece is incredibly complex, with no less than 12 complications, but it is also a work of art with its enamel dial and hand-engraved case.

4) Philippe Dufour Grande and Petit Sonnerie Minute Repeater ($5.7m)

Philippe Dufour is one of the greatest independent watchmakers alive and interest in his pieces has kept growing through the years.

It came as no surprise that this “new” Philippe Dufour price would sell at a very strong price. A ​similar watch​ made for the Sultan of Brunei was already auctioned in 2021 for $7.63 million, making the new world record for an independent watchmaker.

5) Rolex GMT-Master 1675, owned by Marlon Brando ($5.1m)

This is a great example where provenance makes a difference.

This Rolex GMT was owned by Marlon Brando and famously worn in the Apocalypse Now movie making it a part of pop culture.

Indeed, the watch is arguably in poor condition (the bezel is missing) and there is a weird engraving on the back that has clearly not been made by a master engraver. The engraving says “m. brando” giving a hint at who made the engraving, and more importantly who the owner was!

Notice the engraving?

Where is the watch market headed next?

The big question is, “Has the luxury watch market rebounded?”

It’s a simple question, but there’s no simple answer here. It all depends on which watches we’re talking about!

The peak for modern watches was in March 2022. Prices tanked for 2 years straight and have only recently begun stabilizing.

While watches that weren’t artificially overhyped still have a bright future, the correction for watches that saw their value grow too high too fast may not be fully over yet. We are still oversupplied. I’m not calling a bottom yet.

While prices were relatively stable in Q4… (likely influenced by holiday shopping trends), overall market health indicators such as the age of inventory and total supply remain historically elevated.

– WatchCharts founder ​Charles Tian​

If we look at vintage watches, the story is completely different, and the market is still growing steadily.

For example, a watch like the ​Rolex Daytona ref. 6263​ has seen its value almost double since 2020. The dynamics are different here because the supply is fixed. After all, there aren’t any new ones entering the market.

2025 will be an interesting and important year for the industry, as it’s an anniversary year. Watchmakers always celebrate anniversaries with important limited-edition pieces, and 2025 a bunch of brands are celebrating anniversaries, including A. Lange & Söhne, Audemars Piguet, Blancpain, Breguet, and Vacheron Constantin.

Despite secondhand watch prices hitting a new two-year low, now might be the time to buy your “grail watch” before the market improves.

There’s a fair chance that the recent crypto resurgence could once again spill over into the values of timepieces.

But a repeat of the unprecedented escalation we saw back then is probably not going to happen again.

And that’s probably for the best. Watch investing is best as a long-term play; an investment meant to stand the test of time. ⌚


That’s all for today.

For more luxury watch insights you can follow me on ​Instagram​, ​LinkedIn​, ​Twitter​ and at ​marcmontagne.com​.

See you next time,
Marc

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Picture of Marc Montagne

Marc Montagne

Marc is an expert in watches and an avid collector. With 10+ years in the watch industry (Vacheron Constantin, Jaeger-LeCoultre), he founded WatchAuctionHQ, which was acquired by EveryWatch). Marc is also the author of the book Invest in Watches: The Art of Watch Collecting. You can follow Marc on Instagram, LinkedIn, Twitter and at marcmontagne.com

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