Prices for luxury watches on the secondary market have extended their losing streak to three full years, according to the latest quarterly update from Morgan Stanley and Watcharts.
The report contradicts the latest findings from the British-based Bloomberg x Subdial Watch Index, which show average prices across the 50 most-traded references rising from October 2024 through to February before falling back in recent weeks.
Morgan Stanley’s report looks at more than the average bought and sold prices for the most popular pieces, it draws data from across the secondary market — compiled and curated by Watcharts — on indicators like the rise and fall in inventory levels on the secondary market, how long on average stock takes to sell and how secondary market prices compare to authorised dealer prices.
These indicators are used to calculate not only the comparative strength and health of brands on the secondary market, but also in the primary market.
Morgan Stanley advises its investors that the health of brands on the secondary market is a factor in valuing shares of publicly-listed watchmaking groups.
The exact same calculations are equally useful to large watch retailers, which can get a guide on the likely future performance of brands by monitoring their relative performance against other brands on the secondary market.
Although prices for pre-owned watches have continued to fall for the twelfth consecutive quarter since the spring of 2022, the MS report notes that Q1 2025’s quarter-on-quarter decline of just 0.4% was at its slowest since the start of the slump.
The overall shape of the secondary market is largely unchanged in Q1. Market prices for Rolex, Patek Philippe and Audemars Piguet are still, on average, above recommended retail prices, although AP is getting close to parity with just a 5% premium; a drop of 9% in the spread compared to a year ago.
Patek Philippe premiums on the secondary market have also declined, but are still 13% over retail.
Rolex has overtaken Patek Philippe for the first time to have the highest value retention (secondary market price relative to its retail price) of 15%. Uniquely, among its rivals, this is a slight improvement in market prices for Rolex since the start of the year.
With the exception of the top three brands, discounting is reaching alarming levels across the secondary market after value retention dropped across the board by 6% for the likes of Cartier and A. Lange & Sohne, up to almost 11% for IWC and Vacheron Constantin.
In a snapshot of the market taken on April 1, average secondary market discounts from retail prices for the biggest brands were 29% for Cartier, 32% for Omega, 33% for IWC, 36% for Vacheron Constantin and an eye-watering 38.4% for Tudor.
The figure for Tudor is particularly interesting, because it was also one of the worst-performing brands for new watch sales in 2024 with an estimated drop in new watch sales of 34% last year, according to Morgan Stanley and LuxeConsult.
If new watches do not sell, they invariably find themselves for sale on the secondary market and, as the volume of inventory rises, prices can slump.
It was this doom loop that led Richemont to spend around €500 million in 2016-2017 buying up unsold watches, mainly from Cartier, to stop them being dumped on the grey market.
That buy-back followed a slump in Chinese demand that will feel all-too-familiar to manufacturers today, which are also facing a perfect storm of record high prices for gold and the Swiss franc in addition to the turmoil caused by US President Trump’s tariff policies.
These factors are leading to price rises, particularly in the United States where the dollar is weakening and the tariff impact is greatest.
