The Swiss watch market is experiencing a significant shift, particularly in the secondhand sector where prices are on the decline. This trend is especially favorable for buyers interested in Rolex watches, a brand known for its scarcity and long waiting lists.
According to a recent report by Morgan Stanley, the WatchCharts Overall Market Index, which monitors 60 luxury Swiss watches from 10 brands in the secondhand market, has dropped for the ninth consecutive quarter in Q2 of this year. Prices have been sliding since the peak of the pandemic in Q1 of 2022, with a 2.1% sequential decline and a 1.2% year-over-year drop in Q2.
The downward trajectory in prices is expected to persist throughout the year, impacting both the secondary and primary markets. Only a handful of brands, including Montblanc and Hamilton, saw price increases, while popular luxury brands like Rolex, A. Lange & Söhne, and Audemars Piguet experienced declines.
One intriguing revelation from the report is that Rolex, previously known for its resilience to market pressures, is starting to feel the effects. Speculation in Rolex watches is reportedly diminishing, leading to increased availability of new Rolex watches at authorized dealers (ADs).
Morgan Stanley’s analysis centered on the gray market supply and wait times for specific Rolex models to gauge the level of speculation. The decreasing gray market supply, attributed to rising retail prices and diminishing profits from watch flipping, suggests a shift in market dynamics. Additionally, improved wait times for popular Rolex sports watches indicate a decline in demand and speculation.
As a result, there is greater availability of Rolex watches at the AD level for regular consumers, presenting a unique opportunity for Rolex enthusiasts to acquire their desired timepieces. The reduced speculation and improved market conditions may benefit both buyers and sellers in the luxury watch market.
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