Secondary market prices for the most traded watches from Rolex, Audemars Piguet and Patek Philippe are at two-year lows, according to a new research paper from Morgan Stanley.
A plunge in prices for what the report describes as the big three watch brands began in March 2022 after a steep rise in the preceding 18 months.
By the end of 2022, prices were off by 26% from the peak in March for the 60 most traded watches featuring on the WatchCharts Overall Market Index.
The secondary market has been more stable since the start of 2023, but the first six months has still seen a further 8% decline from January to June, according to the WatchCharts Index.
Drilling into the numbers, Rolex prices fell least, by 2%, while Patek Philippe and Audemars Piguet declines were steeper at 7% and 8% respectively.
Overall, prices for the most traded watches are now back at June 2021 levels, although remain above retail prices for models with long waiting lists.
According to Morgan Stanley report, there are still 89 models, which is 72% of those tracked by WatchCharts, still commanding a premium on the secondary market compared to authorised dealer prices.
Almost half of the references are from Rolex, with Patek Philippe, Audemars Piguet and Vacheron Constantin making up the rest.
It is worth noting that WatchCharts analyses advertised and sold prices on the secondary market for its indexes, which are well above the prices being offered when dealers are buying watches.
Because dealers need to build in a margin after the cost of authenticating, servicing and refurbishing watches, they offer considerably prices.
Some have told WatchPro in recent months that there are only a handful of references for which they will pay over retail in today’s market.
Morgan Stanley notes that the privately-owned Big Three continue to outperform brands from the publicly listed groups like Richemont and Swatch Group.
Omega’s catalogue continues to be heavily discounted on the secondary market, with prices slipping to 28% below retail in June (down from -26% in February), although this may be explained by a worldwide price rise for its new watches in June.
Taking all of the brands in Richemont’s Specialist Watchmakers division, discounts deepened from 13% below retail in February to 19% in July.
There are watches within that cohort that have held up better than others including Vacheron Constantin’s Overseas family and IWC’s Big Pilot ceramic pieces.
Has the market found a floor?
Looking ahead, Morgan Stanley is predicting that secondary market prices have further to fall based on inventory levels remaining high compared to the period when prices were rising.
“Total supply on the second hand market started to decline, though the overall inventory level remained elevated, and so does the number of median days watches stay on the market before being Given the stock level, it is likely that secondary watch prices will continue to fall in 3Q23,” the report predicts.
