The Pre-Owned Luxury Watch Market: First Rise in Three Years

After a grueling three-year winter, the pre-owned luxury watch market might finally be seeing a glimmer of spring! The latest reports from Morgan Stanley and WatchCharts have pierced through the gloom surrounding the watch world like a bolt of lightning – secondary market watch prices have recorded their first quarterly increase in over three years. Sounds uplifting, doesn't it? But hold on, how much genuine warmth does this "spring" truly bring, and what hidden currents lie beneath the surface? Today, we're diving deep to uncover the full story!

A Glimpse of Recovery: The 1.5% "Mini-Spring"

Following thirteen consecutive quarters of decline, the Swiss secondary watch market finally halted its slide in the third quarter of this year, achieving a modest 1.5% quarter-over-quarter growth. For an industry long plagued by high tariffs, slowing demand, and soaring production costs, this is undoubtedly a welcome signal. Secondary market prices, often considered the "barometer" of the watch world, sensitively reflect market sentiment, brand value, and the passion we enthusiasts hold for specific models.

But does this "mini-spring" truly herald a full-blown recovery? Let's break it down.

The Dynamic Duo: Rolex and Patek Philippe's "King's Glory"

The undisputed stars of this "rebirth" are Rolex and Patek Philippe. Together, they account for over two-thirds of the weight in WatchCharts' overall market price tracker, meaning their performance largely dictates the market's direction!

• Patek Philippe: Showed particularly strong performance, with secondary prices soaring by 3.9% quarter-over-quarter, marking its best quarterly performance since early 2022!

• Rolex: Not to be outdone, achieved a solid 1.3% growth, driven by robust demand for classic series like the Day-Date and Datejust.

This aligns perfectly with what fellow enthusiast Gary Gump observed: "I do see prices rising, but only on certain models - popular Rolex and sports Patek definitely rose." It seems classics and popular models remain the hard currency of the market!

The Price of a Rise: Value Retention's Double-Edged Sword

However, behind the data, there's always a story. When it comes to value retention, the situation appears more complex. The continuous rise in retail prices is relentlessly eroding secondary market value.

• Rolex: Continues to be the epitome of value retention! It remains the only brand whose secondary transaction prices significantly exceed its retail prices, boasting a value retention (VR) of an impressive +15.7%! Perhaps this is what we mean by "a Rolex is forever"?

• Patek Philippe: Despite the increase in secondary prices, aggressive retail price hikes of up to 15% in the US have caused its overall value retention to dip into negative territory (to -4.7%)! Nevertheless, popular sports models like the Aquanaut and Nautilus remain highly coveted, maintaining strong premiums.

This begs the question: are these aggressive retail price hikes a sign of brand confidence, or are they mortgaging the future? Meanwhile, Bodhi humorously asks, "Is this the perfect time to sell my Trump tourbillon?" (We get your desire for "wealth accumulation," Bodhi!). But as Mimis Watches astutely points out, "But in reality, the news isn't all that rosy, as the value of watches continues to decline when adjusted for inflation." A sobering thought for those solely looking to "flip" watches.

What Do Enthusiasts Say? Investment, Collection, or "Steal"?

Facing this market uptick, watch enthusiasts are, as expected, a vibrant chorus of opinions, sparking lively debates!

Faded Glory passionately pleads: "I wish the media would stop discussing the watch market like the stock market... it's about the watches themselves!" Having collected watches for 25 years, he's long been unfazed by price fluctuations, driven purely by passion. 30 tonnes 2 and Ty King echo this sentiment, finding joy in the tranquility and beauty of "sleeping small antique watch villages." And SKX.gateway delivers a sharp jab: "Hodinkee mentions 'value retention' almost more than 'lume'!" – a sentiment many can relate to!

For the average consumer, what do these ups and downs truly mean? Colin Cullen laments, "It feels like such turbulent times right now." High tariffs make new watches prohibitively expensive, and with the post-pandemic "watch craze" cooling down, many are either offloading watches they bought or simply losing interest. No wonder some sigh, "Consumers just walk away from MSRP, it's either used or nothing." This seems to be the reality for many "budget-conscious" enthusiasts, making the secondary market a beacon of hope for finding a "deal." Case in point: Colin Cullen snagged a 20-year-old Omega Seamaster for half its 2006 retail price!

Group Dynamics: Who's Winning, Who's Lagging?

Moving beyond individual brands, let's examine the "watch conglomerate power rankings" – where things get even more intricate!

• Rolex Group: Led all Swiss conglomerates with a 1.3% quarter-over-quarter increase, with both Rolex and Tudor (+1.4%) showing strong performance.

• Swatch Group: Saw a modest 0.5% QoQ increase, primarily buoyed by Omega (+2.0%). Interestingly, sharp-eyed online commentators like avusblue noticed, and Andy Hoffman confirmed, the "MoonSwatch/Blancpain collaboration" models are seeing a resurgence in the secondary market. This "affordable collaboration" trend certainly adds vitality to the market, though its overall contribution to the group is limited. However, the weaker performance of Breguet (-3.4%) and Blancpain (-4.1%) dragged down the overall average.

• Richemont Group: While price declines slowed, they still fell by 1.7% QoQ. Cartier (+0.5%) remained resilient, and Vacheron Constantin even saw a slight increase (+0.2%) for the first time in over three years. Yet, the persistent weakness of brands like IWC (-3.2%), A. Lange & Söhne (-3.3%), and Jaeger-LeCoultre (-5.2%) raises concerns for this luxury giant.

• LVMH: QoQ decline narrowed to 1%. TAG Heuer (+1.5%) showed a slight rebound, Zenith (-0.4%) held steady, but Hublot (-2.8%) continued to lag. Morgan Stanley noted that the lack of stable brands with significant secondary market share continues to put LVMH's long-term performance behind other Swiss groups.

Here, the comment from enthusiast Aquatic Animal seems particularly prescient. He boldly predicts that those "emerging or lesser-known, yet high-priced" independent brands, such as Greubel Forsey, URWERK, and MB&F, might face a "reckoning day," potentially seeing discounts far below even half their asking price. This serves as a stark wake-up call for collectors pursuing niche luxury!

Future Outlook: A Rollercoaster of Hope and Caution

While the positive inflection point in secondary market prices is encouraging, its sustainability remains questionable. Continuously rising retail prices and the 39% US tariff on Swiss goods may merely be temporarily pushing some demand towards the secondary market. Five brands – Patek Philippe, Cartier, Omega, Tudor, and IWC – further increased their retail prices in Q3, undoubtedly exacerbating the widening divergence between retail and secondary market pricing trends.

Ginger hits the nail on the head: "This also indicates the devaluation of fiat currency." The underlying logic of macroeconomics profoundly impacts the microcosm on our wrists. As Chemical Engineer analyzes, when value shifts to resale rather than new sales, this could be a "warning sign of decline within the traditional watch industry" – weakened brand control, inflated retail prices, and declining consumer trust are all potential pitfalls we need to be wary of!

Your Watch, Your Choice!

So, fellow watch enthusiasts, is this secondary market rebound the beginning of a "V-shaped recovery," or a "dead cat bounce"? It's time to weigh in with your insights in the comments section! Do you think your next watch should be new, or will you hunt for a "deal" in the secondary market? Are you chasing rare, value-retaining pieces, or are you drawn to the pure art of mechanical watchmaking?

It's time to join the discussion and share your thoughts!