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Are Luxury Watches A Good Investment?

Time-tested investments.

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Words: Liam Chapman

Before we dive into the whole “luxury watches as an investment” thing, we should clarify—we’re not your go-to investment advisor. If you’re in for some serious money talks, we suggest you ring up the professionals. Now, if you’re a classic style enthusiast like us, and watches are practically a second language, you’re in the right spot. Because we’re about to unravel the age-old debate: “Are luxury watches a smart investment or just another excuse to splurge?”

Today, we live in a world where financial moves are more unpredictable than your morning coffee order. In the midst of all that chaos, luxury watches often feel like a comforting constant. They do more than tell time. They make a statement.

But, does that statement include a solid return on investment? Let’s find out.

Topics Discussed

Things To Consider Before Investing

Just like most investments, you don’t want to rush your decision before weighing all the pros and cons. Below are some things you should definitely consider before jumping into a big investment. 

(Note that these are key points that we explore in much more detail throughout the article).

1. Make Sure You Can Afford It

Before making any investment, especially in luxury items, make sure your financial basics are covered. Investing in luxury watches should come from disposable income, not funds earmarked for essentials.

2. Understand The Market

Understanding the luxury watch market as a whole is crucial. This includes knowing which brands and models appreciate over time, understanding market trends, and recognizing the factors influencing watch prices. (More on this below).

3. Investment Vs. Passion

Buying something simply because you love it and buying something with the intention of making a profit are two completely different things. And if you mix them up without realizing it, you’re about to learn an expensive lesson.

4. Know Your Exit Strategy

When the time comes to part ways with your beloved wrist buddy, how will you do it? When is the best time? What channels should be used? What taxes and fees will be taken from your end? Trust us when we say, answering these questions sooner rather than later will be a life saver.

5. Condition & Authenticity Matter

The condition and authenticity of the watch are extremely important when trying to figure out if your watch is an asset or not. In order to verify its authenticity, keep all documentation about it and try not to hold onto the original packaging as well—these factors can significantly affect how much you’ll be able to sell it for.

6. Diversification Is Key

It can be stressful putting so much money into one item, so diversify! Spreading out your investments can help reduce risk. By doing this, you won’t lose everything if one piece doesn’t perform as well as expected.

7. Be Prepared For The Long Haul

Luxury watches are typically a long-term game. Appreciation can take years, if not decades. Patience is essential in this market—don’t get frustrated when things don’t go your way at first—and understand that short-term values will fluctuate due to changes in supply and demand.

 

Now that we’ve gone over these main points, let’s take a deeper dive and venture into the intricate world of luxury watch investments.

The Allure Of Luxury Timepieces

Luxury watches captivate the imagination like few other possessions. They aren’t just there to remind you it’s 3PM, they’re there to make a bold announcement of one’s character. Think Rolex, Patek Philippe, Audemars Piguet—these names aren’t just brands; they’re VIP passes into the world of exclusivity and taste.

Crafted with the kind of precision usually reserved for spaceship launches, luxury watches are the Ferrari’s of the timepiece world. And let’s not forget the emotional connection—these aren’t just watches, they’re stories on your wrist.

Whether you’re donning a classic Rolex Submariner or a sleek Patek Philippe Calatrava, you’re not just wearing a watch; you’re embracing a slice of horological genius.

Understanding The Luxury Watch Market

At a Glance

Market Size (2024): $39.53 Billion

Revenue Forecast For 2029: $51.70 Billion

Growth Rate: CAGR of 5.52% from 2024 – 2029

Fastest Growing Market: Europe

Largest Market: Asia Pacific

Top Players: Rolex, Patek Philippe, Audemars Piguet

The luxury watch market is not only vast, but it’s also a rapidly changing landscape. With so many brands boasting a long and interesting history in the business, it should come as no surprise that these watches have an incredibly high demand (and price point).

These aren’t the run-of-the-mill timepieces that you can get for cheap, luxury watches are considered to be works of art because the craftsmen behind them spent years perfecting their pieces. Not to mention they often symbolize a person’s wealth or status—making them even more desirable (and expensive).

But if you want to understand this market better than most, then you need to dig deeper than just appreciating the skill that goes into making luxury watches. To truly know what you’re talking about you must analyze aspects like consumer behavior, economic indicators and recent fashion trends.

When big slumps occur in the economy at large—everyone tends to feel it—especially those invested in luxury items.

More people are opting out of physical stores altogether and searching for their desired items online instead. This means companies must adapt and find ways to connect with these consumers through social media or other platforms.

To stay up-to-date with the secondary watch market online, we recommend browsing Chrono24.

Historical Performance

The luxury watch market is full of examples where certain timepieces have blasted past their original price points, turning into highly sought-after assets. 

The following three timepieces perfectly illustrate this remarkable potential for growth.

1. Rolex Daytona "The Panda"

In 2016, the Rolex Panda Daytona watch was launched. It sold for just above $12,000 first, and reached a price of $15,000 before it was discontinued. The stainless steel timepiece is the only one in the brand to sell consistently above its MSRP with significant waitlists. In 2017 the price shot up 9% selling for about $16,500. By 2021 it was going for around $35,000 after social media promotion and the auction of Paul Newman’s Daytona. 

Despite ups and downs in the market, its average annual return over seven years is impressive at 12.7%.

2. Audemars Piguet Royal Oak

The Audemars Piguet Royal Oak had a crazy increase in market value during the first half of 2021, doubling from around $60,000 to $120,000 in just a few months. There were a number of reasons for this, from Patek Philippe pulling the plug on the Nautilus Ref. 5711 after 25 years and the limited production through AP’s boutique only system played a huge part in this watch’s popularity spike. (Not to mention the record breaking auction prices at Christie’s and Phillips).

Although everything listed above has made the watch more valuable, they’re not the only things that make this piece such an amazing investment opportunity. The Royal Oak has always been a sought after timepiece due to being based on an iconic watch model and its unicorn rarity.

3. Rolex GMT Master II "Pepsi"

The (126710 BLRO) Rolex GMT Master II “Pepsi,” a famously collectible stainless steel GMT watch, has maintained a premium over its “Batman” counterpart due to its original color scheme and collector demand. The timepiece was launched in 2018 with a retail price around $16,000 and has never traded below that figure on the secondary market (aided by the Rolex price surge that followed the Paul Newman Daytona auction in 2017). 

Made even more famous as the main watch worn by Raymond Reddington in the hit TV series “The Blacklist,” it was worth about $21,000 in 2021 and reached nearly $35,000 in early 2022. With an average annual return of 12.3% over five years even after recent volatility, the Rolex Pepsi has proved itself both as a luxury timepiece and an investment.

Factors That Influence Value

The value of a luxury watch isn’t determined by time alone. It depends on various (tangible and intangible) factors that can have a huge impact on its value in the market. Once you know what these elements are, you’ll start to notice why some timepieces will skyrocket in value while others don’t.

1. Rarity

One of the key driving forces behind the high price tags for luxury watches is rarity. Limited edition models or those made in very small numbers often become highly sought after pieces by collectors.

2. Brand Authority

It’s a well known fact that brand prestige and history play a big role when it comes to determining how much a timepiece is worth. Brands like Rolex or Patek Philippe enjoy long-standing reputations for quality and innovation, which often keeps their watches at high prices (or even drives them higher). 

3. The Condition

No one needs telling that an item’s condition affects how much someone is willing to pay for it. A watch in pristine condition, especially if it still has its original parts and packaging, will almost always fetch more than one that has been refurbished or heavily used.

4. Vintage Pieces (Well-Preserved Classics)

Collectors will go nuts for vintage watches because they are so rare (especially if they’re from notable periods or have historical significance). As such, their value tends to increase more rapidly than other pieces.

5. Trends

Market trends can dictate how much certain styles of mechanical watches cost. For example, if there’s a sudden rise in demand for classic style then the price tag of classic timepieces will reflect this newfound popularity.

6. The Emotional Aspect

Beyond those tangible factors lies another dimension—emotional value. Watches given as gifts or with personal stories attached may not mean much to anyone but they hold untold worth in the hearts of those who own them. This intrinsic attachment might not directly translate into financial value but it underscores the unique position luxury watches hold as both personal treasures and potential investments.

 

To sum up, the value of a luxury watch is a mix of its rarity, reputation, condition, historical and emotional significance with respect to current market trends. If you understand these things, you’ll be able to strategically separate the timepieces worth investing in from those that are simply nice to look at.

Our Verdict

After exploring historical performances and investigating the critical factors that influence value (from scarcity and brand prestige to condition and historical significance) one thing becomes clear. There’s potential for luxury watches to be valuable assets long after they’ve served their original purposes.

That being said, this only applies to some watches. Rarity alone doesn’t guarantee appreciation. And though collectors can feel a watch’s emotional worth deep within them, it doesn’t always show up on a balance sheet.

However, we have hope (albeit cautiously) that carefully chosen investments will pay off in the end. For those who want to add a little horology to their portfolio, the luxury watch market presents plenty of opportunities with genuine investment potential. 

Remember that no investment is without risk. Use caution before diving in headfirst!

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