What Makes Luxury Watches Lose Value?

[EdwardNorton1963]

I have always been a fan of luxury watches but that was because I enjoyed them for the regular reasons... I have been lookig through my my collection and have realised some of my watches have lost value throughout time. I am curious what you think makes watches deppreciate?

I totally understand that that the brand matter heavily, but what other factors do you think really effect the price over time? I have read from https://www.bobswatches.com/rolex-bl...ose-value.html that condition, market rarity, trends. condition and even the movement. At first this makes complete sense, but can you really predict or even control any of those factors? As purely an aethetic buyer that is interested in the investment side of watches, I am trying my best to learn more about investment pieces, and what made some of my watches lose so much value!

Let me know your thoughts, and maybe even how you prepare for your next investment piece?

[MTBer]

I’m in a weird spot here- I’ve never sold a watch and hope to never need to, so how much value one loses should be irrelevant to me. However, I’ll admit to being happy that 3 of my 4 “nice” watches have actually appreciated in value, at least nominally, since purchased.

As for what makes a watch lose value, ramping up production to meet demand is a short term capitalization that kills resale…and I hate to admit that given the Rolex situation these days- definitely some cognitive dissonance

Anecdotally, I’d say watch brands that use plating instead of solid gold tend to drop faster as well.

[77T]

You’ll get a lot of feedback on this question - collectors here come in many stripes. Some are purely aesthetic. Some purely financially driven. And many in-between.

In other words, gird yer loins…

Nobody likes losing money so I’m sort of on that side. But I buy and trade watches for which I feel an affinity and only keep the ones with huge emotional ties.






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[NickD1975]

Originally Posted by 77T

You’ll get a lot of feedback on this question - collectors here come in many stripes. Some are purely aesthetic. Some purely financially driven. And many in-between.

In other words, gird yer loins…

Nobody likes losing money so I’m sort of on that side. But I buy and trade watches for which I feel an affinity and only keep the ones with huge emotional ties.




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OT a bit, but what size is that Patek?

[77T]

Originally Posted by NickD1975

OT a bit, but what size is that Patek?

36mm 5119 Calatrava


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[NickD1975]

Originally Posted by 77T

36mm 5119 Calatrava


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Thanks - it looks great

[arcadelt]

If I knew what makes assets appreciate and depreciate I would be a trillionaire - I am not. What I can say about trying to predict which watches make good investments is that it is entirely based on sentiment, so forget trying to look for any inherent value and study how mass positive sentiment is developed.

[Gab27]

The impact that social media plays on this today is extremely fascinating. It seems to very rapidly change the number of people who want a specific watch.

[padi56]

Originally Posted by Gab27

The impact that social media plays on this today is extremely fascinating. It seems to very rapidly change the number of people who want a specific watch.

Well today many rely on so called social media to do there thinking for them, as many today have lost the use of there brains to think for themselves. And hype today sells watches as many just buy the hype to wear the hype, today Rolex and most so called high end brands now little more than £££$$$€€€ things.

[teck21]

I don’t think it’s anything more than desirability versus availability.

And for something as mass produced and sold as Rolex watches, there’s probably very little by way of individual watch qualities that make them so desirable compared to something like a piece of art work.

A lot of Rolex watch desirability is extrinsic to the watch itself. Especially the brand itself.

People often want Rolex watches not for the watch, but for the crown. The same cannot be said of any other watch brand, save for a tiny few small producers.

To find pieces of other brands that have investment value, one really needs to have an eye for what intrinsic qualities sets a particular watch itself from all its competitors, and also have an understanding of the possible demand and supply dynamics, present and future. Things like production run and numbers.

Rolex watch investors today generally don’t have that. Most behave like gamblers but don’t realise they’re just gambling.

Especially since every economic cycle introduces a generation that has never been burnt before

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[1665fan]

Polishing....losing the boxes and papers

[Stan Cooper]

What Makes Luxury Watches Lose Value?

Fading demand for some reason.

[bp1000]

God knows

You have watches that trade under retail, get discontinued and then jump.

So you can boil it down to primarily availability, then demand, then a sprinkle of hype. Anything that is outside of these, probably affects the watches value.

[JSolution]

In a nut shell - not being a Rolex.

[LA_LEC]

Originally Posted by JSolution

In a nut shell - not being a Rolex.

Exactly

[Brny11]

Originally Posted by JSolution

In a nut shell - not being a Rolex.

This.

If you buy a Rolex grey, you are in risk of the market correction that may or may not come. If you buy retail, you will likely lose 10-15% historically + whatever service costs you incur (factoring inflation).

Outside of that, if your watch value shoots up, it is / was luck of the draw.

If you buy outside Rolex, AP and PP, you will take a hit financially 99.9% of the time.

Buy what you love, watches are not a great investment.

[Robf52]

Originally Posted by JSolution

In a nut shell - not being a Rolex.

True, and buying higher than msrp.

[JSolution]

Originally Posted by Robf52

True, and buying higher than msrp.

have to say you’re incorrect there. I buy everything over list price as I can’t get a foot in the door with an AD (nor do I have the patience). Over the last couple years these have only continued to rise and I have some pretty astounding offers on my platinum Daytona for example as of late when I’ve tested the waters.

I tend to see it more as buying from an AD is buying with a discount.

[bob sims]

Originally Posted by JSolution

In a nut shell - not being a Rolex.

[Master_Grogu]

They lose value because they are massively produced items that have no intrinsic worth besides a heavy price tag. Make no mistake, “luxury” is not synonymous with “worth” or “value”.

Unless you get collector, rare items, don’t expect your watch to keep any sense of value through time.

[Oxfordian]

My first Omega now sells for about £1000 more than I paid for it, but if you take inflation and all that rubbish into account then I am probably just about breaking even, so that’s pretty good.

None of mine or my wife’s watches or jewellery has been bought because it was going to go up in value, it was bought because we liked it. If I worried about retained value I would never buy anything.

Buy items you like and what you want to wear, that way you never worry about value as you never think of selling it.

My kids will inherit our stuff at some point, what they choose to do with it is up to them, maybe it will help them over an issue or maybe they’ll decide to wear the stuff, it won’t matter to me.

[Brew]

I doubt it has anything to do with the actual watches. Rather, a lack of aesthetic buyers to kick-off the investment seeker's mania will result in loss of value, I think.

[Fenrira]

To answer OP’s question: let’s say I buy a dress watch from Vacheron for $15,000. A person who’s interested in the exact same watch can go to any VC dealer tomorrow and get exactly what I got. If they don’t have it in stock now, they’ll have it in a couple of months.

Since he can do that, he’s got no reason to pay me $15k for mine. He’d only take mine over the AD’s if I offer him a great deal, way below retail. For a watch like a Daytona, that first option isn’t available to the guy unless he’s got a strong relationship with the AD.

[Golfbone]

There have been thousands of great artists over the centuries and millions of great pieces of art but what goes up in value is anything.....and I mean anything with the name of one of the few very famous artists over the years. Any daVinci, Michaelangelo, Picasso, Monet, Van Gogh etc. will appreciate wildly over time even if it's ugly or just scribble in some cases. With watches....there are a few ....very few names that are good safe bets to hold value and the rest .....it's not a matter of quality or design so much as name. People want the name more than the piece. Reading about the Salvator Mundi work that may or not be by Da Vinci but fetched almost half a billion dollars despite being in miserable condition and a rather ugly painting makes it clear what really matters to people who spend lot so money on these things.
If that thing turns out to be anything other than a DaVinci underneath all the restoration it's basically worthless.

[beshannon]

Originally Posted by EdwardNorton1963

I have always been a fan of luxury watches but that was because I enjoyed them for the regular reasons... I have been lookig through my my collection and have realised some of my watches have lost value throughout time. I am curious what you think makes watches deppreciate?

I totally understand that that the brand matter heavily, but what other factors do you think really effect the price over time? I have read from https://www.bobswatches.com/rolex-bl...ose-value.html that condition, market rarity, trends. condition and even the movement. At first this makes complete sense, but can you really predict or even control any of those factors? As purely an aethetic buyer that is interested in the investment side of watches, I am trying my best to learn more about investment pieces, and what made some of my watches lose so much value!

Let me know your thoughts, and maybe even how you prepare for your next investment piece?

What other things do you invest in? When do you plan to sell? What other uses do you have for your investment capital?

Cannot help without know your broader financial picture and you investment goals. Past performance is no guarantee of future results

[Mystro]

Luxury items for the most part are a extension of a lifestyle. Holding value or losing value should not matter if its purchased in the true spirit of a luxury purchase. Wear the watch and don’t let the watch wear you and you won’t care so much about resale value. Problem with the Rolex brand itself is that it’s reputation seems to be migrating away from the watch itself and hyper focused on all the superficial “sales tactics” to talk you into buying the watch like “hard to get” “resale value”, etc…. These sales tactics have become the main talking point anytime the Rolex brand comes up to the point it’s like a mandatory excuse to justify your luxury watch purchase.

I’m the end the world could care less about what watch you are wearing.

[MILGAUSS88]

Lack of demand.

[flyboyyy]

Originally Posted by MILGAUSS88

Lack of demand.

Bingo - technically speaking anything of "value" is simply a math equation of supply and demand.

If many want what you have and there are very few to be had, then value goes up. If few want what you have and there are many to be had, then price goes down. Watches are no different than anything else people collect (guns, cars, art, wine, stamps, shoes, magic cards, etc..).

Watches are especially hard to predict, because as many others have pointed out they as a whole are constantly being produced, and the whims of the interwebs/social media can make a specific reference (that may have been a dog) extremely coveted overnight.

Lastly, to MTBer's point (which is spot on), any of the mfgr's that ramp up production to meet "demand" usually kill resale quickly. This has happened many times (think Panerai) - or they start making every watch a "limited/special edition" of some sort.

[Tools]

Economics 101.

A product is only worth what a willing buyer will pay to a willing seller.

Any luxury product, or non-luxury product, will "lose value" if there is nobody willing to buy it at the higher price.

[turkeysub93]

Desirability or lack thereof...but your question is a loaded one as one man's trash is another man's treasure.