The Rolex Index Is Still Falling: Economic Uncertainties Impact Demand

Luxury Swiss watch prices have seen a significant decline, with prices at a two-year low on the secondary market. 

Brands like Rolex, Patek Philippe, and Audemars Piguet are experiencing a drop in prices after reaching record highs in early 2022. The Bloomberg Subdial Watch Index, which monitors the value of the top 50 pre-owned luxury watches traded, is notably below the price levels of August 2021.

This downturn in demand for premium timepieces from renowned Swiss manufacturers is attributed to a combination of factors including sluggish economies, rising interest rates, and the crash of cryptocurrencies. 

London-based Subdial, a pre-owned watch dealer, has compiled data indicating that the surge in prices witnessed during the pandemic-induced uncertainty peaked in February of the previous year. The rapid and unsustainable price escalation, similar to stock market trends, led to this current correction in the luxury watch market.

Via Bloomberg Subdial Watch Index

Analysts draw parallels between the watch and stock markets, noting that global events such as economic downturns and geopolitical tensions, as well as rising commodity prices, can cast a shadow on both markets. Investor sentiment is impacted when market values decline, resulting in reduced buying activity and decreased demand, thereby driving prices down.

Notably, Rolex watches have displayed a history of consistent price increases over the long term.

The broader Bloomberg Subdial Watch Index has seen a decline of 10.5% over the past 24 months, 16.3% in the last year, and approximately 3.2% in the last 30 days, indicating a slightly faster downward trajectory, but still not at the pace from a year ago when prices were falling from the February peak. 

Chart pictured via

Notably, not all watches saw their values fall in the second-hand market this year. The more popular models have been predominantly affected — those that saw a sharp increase in value in early 2022, further indicating that the decline is a market correction.

Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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