The overheated secondary market for new and used watches peaked in the first quarter of this year and has been declining sharply since.
That does not mean unicorn watches from the likes of Rolex, Patek Philippe, Omega and Audemars Piguet can now be bought at discounts to their retail prices at authorized dealers, but corrections of up to 50% off peaks have created dramatically different trading conditions for collectors and investors.
One man with a keen interest in how to make money in a cooling market is Danny Shahid, whose DWL boutique for after market watches in London is a place where collectors can come for advice as the watch market shows early signs of losing momentum.
WATCHPRO asked him what watches he would buy, hold and sell in the current climate.
Watches to buy
In a cooling market, the obvious risk is that an asset’s value will fall in the short term. Therefore, buying a watch in a cooling market requires long-term bullishness.
It’s recommended to buy a watch that you think will see a price gain over a lengthy period, such as the stainless steel Rolex Submariner or GMT-Master II.
They have performed famously well over the last decade and will likely continue to do so, regardless of the overarching market conditions. Relatively affordable in the world of luxury timepieces, these models provide a tremendous long-term opportunity with limited risk when we consider the model’s previous performance.
While the Audemars Piguet Royal Oak Offshore has languished in the shadows of its older sibling, its value has been disproportionately low for the last few years compared to the Royal Oak.
As such, its price could see rather impressive gains during the next watch market explosion if it receives the recognition it deserves.
Like the Submariner and GMT-Master II, this would be a long-term purchase but with greater risk, albeit the gamble has more significant potential returns. It is also notable that some Royal Oak Offshore variants haven’t significantly declined in recent months, unlike the Submariner and GMT-Master II.
Another watch that presents a fantastic opportunity to buy is the Vacheron Constantin Overseas.
Given that the Patek Philippe Nautilus and AP Royal Oak are valued much higher, it is reasonable to assume that it will catch up to some degree.
As the least well-known of the three watches, it is a sleeper option that most still don’t know about. It’s a watch that is currently flying under the radar as an “if you know, you know” timepiece, so its potential upside is relatively high.
Watches to hold
The watches worth holding will speak to long-term trends, such as the Cartier Santos de Cartier.
It had an explosion of popularity in 2021 that continued into this year, with waiting lists building up and even secondary market premiums for new, unworn models.
It has since seen a decline like most other watches but, if you own one, best to continue holding it rather than selling it now and taking a hit as its long-term outlook remains strong.
With its iconic aesthetic derived from its integrated bracelet, square-shaped screw-set bezel and signature Cartier dial, it has the foundations to explode in popularity when the economy picks up again.
The Girard Perregaux Laureato and the Lange & Sohne Odysseus were both experiencing price explosions, demand and desirability, and this looks set to continue when we emerge from the current economic situation.
If you bought before the price increases in late 2021 and early 2022, you should have a sufficient cushion to facilitate the luxury of holding. Likewise, if you are getting a good deal and think the watch will perform well in the long term, then buying makes sense.
Watches to sell
While most watches will fall in value during a cooling-off period, those that should be sold are watches that don’t have a positive long-term outlook because they nod towards trends that don’t come around very often.
Two-tone models like the Submariner ref. 126613 and GMT-Master II ref. 116713 are not nearly as popular as their stainless steel siblings and probably won’t become desirable again for a few decades.
If you need the watch to be popular and the economy to be healthy both at once, it is advisable to sell the watch.