High-end timepieces have long been seen as symbols of prestige and status, and in 2024, they are popular amongst affluent individuals across all age groups seeking to invest in examples of quality craftsmanship that will last them for many years to come. Whether you’re simply a luxury watch fan or more of a strategic collector, splurging on a rare piece can prove a wise move, as many appreciate in value over time – in some cases, rather dramatically.
It’s a lucrative market, and one with great potential for long-term growth and profitability. But amid this surging demand, the question remains: Is it the right time to invest in luxury watches? Here, we take a closer look.
The waiting game: Authorised dealers and longer lists
Walk into any authorised dealer of luxury watches, and you’ll likely encounter a lengthy waiting list for the most sought-after timepieces. Fuelled by the increasing demand from everyone from collectors to first-time buyers, it’s becoming harder and harder to gain access to some of the most coveted watches, like the Rolex Daytona or AP Royal Oak. But why the sudden surge in interest? Well, several factors have contributed to it.
First off, let’s not forget that luxury watchmakers know exactly what they’re doing when it comes to garnering interest, and creating a sense of scarcity is what they are best at. By making only a limited number of timepieces each year, they ensure that there is always greater demand for any given model than the number available, making them seem even more exclusive and enhancing their appeal. The majority of luxury watches are handmade and are examples of the utmost in impeccable craftsmanship, which means they genuinely do take time to perfect. As a result, authorised dealers themselves are unable to source as many timepieces as they might like to from manufacturers – hence the need for those waiting lists.
Brand recognition also plays a role. Established watchmakers have built strong brand identities over decades, and owning a Rolex, Patek Philippe, or Audemars Piguet watch has become a huge deal and a result. Buyers are drawn to the exclusivity these brand names bring with them.
And of course, some buyers view luxury watches as investments, because unlike other luxury goods that depreciate rapidly, well-maintained watches can appreciate over time – which means as well as those who simply want to own a particular timepiece for the enjoyment of wearing it, there are considerably more people overall eyeing each new release.
The price of exclusivity
When shopping with authorised dealers, buyers often face a trade-off of time versus cost. Those who can’t wait may instead opt for the secondary market, where pre-owned watches exchange hands – however, even this convenience comes at a premium, and even with second hand watches it’s a case of the more highly sought-after the watch, the higher the price.
In part, this is down to supply and demand dynamics. Basic economics come into play, and when demand outstrips supply, prices rise, with rare models and limited editions commanding hefty premiums.
Even the watches that are not rare have a huge waiting list. A simple Steel Daytona can have a waitlist of as long as 5 years. Hence, buyers are more likely to be willing to pay the premium to have their timepiece immediately, rather than waiting for their turn to come.
A common practice amongst authorized dealers is that they often ask their customers to buy more in order to have higher chances of getting privileged access to the more desired models in the future. In essence, the more you spend, the more likely you are to get the VIP treatment.
According to WatchMeastro.com, a leading pre-owned luxury watch store in Dubai, people tend to prefer paying the premium to secure a particular watch upfront rather than seeking to build a profile with an authorised dealer in the hopes of getting their hands on the piece one day. They’d rather walk in and pick up their dream watch today than have to wait for it for years to come, and when money is no object, why wouldn’t you?
Cryptocurrency and price peaks
The crypto boom of 2021-2022 had a notable impact on the luxury watch market, and as the prices of Bitcoin, Ethereum and the like surged and investors reaped significant profits from their cryptocurrency investments, many sought to diversify their portfolios by investing in tangible assets such as luxury watches.
This, along with supply chain disruptions and production delays, led to increased prices and scarcity of certain luxury watch models, and the emergence of blockchain technology in the watch industry provided added transparency and authentication, appealing to tech-savvy consumers.
But eventually, the crypto bubble burst, and as prices fell again, so too did the demand for luxury watches. In turn, the prices commanded by such timepieces also dipped. But now, in 2024, the tides have turned once more. Cryptocurrencies have regained momentum, and so have luxury watch prices, and collectors and investors continue to recognise the value of these timepieces, hence the renewed interest.
The right time to buy
So, is now a good time to buy, or not? For those eyeing a luxury watch, there’s no time like the present to make the investment. Prices are climbing steadily, but they are still far from the peak levels they have seen in the past – which means there is plenty of potential for them to surge again. If you’ve been considering taking the plunge, then 2024 is ripe with opportunity – but be prepared to pay a premium to get your hands on the most exclusive pieces, or like many others, you’ll have no choice but to play the waiting game.
