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Rolex watches are a poor investment today warns Morgan Stanley as supply still exceeds demand on the secondary market

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Pre-owned watch dealers are keen to tell you that the fall in prices since the first quarter of last year has been a healthy correction that is great for the market and their businesses.

Don’t believe a word of it, argues Morgan Stanley.

Despite prices having slumped to levels last seen before the market hysteria of 2021 and 2022, Morgan Stanley believes supply of the most tradeable watches is still far greater than demand.

“We have noticed a significant increase of watch inventory in the secondary watch market year to date as a result of secondhand watch dealers and individual watch investors off-loading their stocks,” Morgan Stanley wrote in a note to investors.

Morgan Stanley quotes figures from Watchcharts, which is among a number of sites that track prices for watches on the secondary market.

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The problem with these trackers is that they are based on advertised prices on platforms like Chrono24, eBay, WatchBox to come up with their pricing graphs, but the prices people are willing to pay are still well below those advertised.

Pre-owned traders naturally want to put a positive gloss on prices — the higher the better — but the reality is that transactions are being done at much lower levels and prices are continuing to fall, which snuffs out demand.

Auction prices are more reliable, because people can see the sold prices, but the most tradeable watches do not tend to go through venerable houses like Bonhams, Sotheby’s Christie’s and Phillips.

Modern online auctioneers like WatchCollecting.com are a good place to see sold prices for the types of watches that are often flipped.

But Adrian Hailwood, head of watches at WatchCollecting.com, says reporting of recent prices has been misleading.

“An advertised price is meaningless without an achieved sale. The market will set the value,” he says.

“Price and availability will always fluctuate and the only way to protect yourself is to buy what you truly like, at a price you can justify to yourself. If the value of your watch shifts up or down, you don’t care because that’s not the reason you bought it,” he adds.

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1 COMMENT

  1. For the CPO program to work buying a new rolex at retail will have to remain difficult, unless cpo prices are substantially discounted which I think is very unlikely.
    Eventually prices will go up not to the silly levels.

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