This 2024, the global luxury watch market is poised to reach an impressive US $49.8 billion (almost AU $765 billion), with Western Europe leading the growth.

Premium timepieces from esteemed brands such as Rolex and Cartier are increasingly sought after, particularly in the pre-owned segment. This growing interest is driven by the allure of alternative investments and the quest for protection against inflation.

The Surge in Pre-Owned Luxury Watches

The pre-owned luxury watch market has experienced significant expansion, a trend mirrored across many global markets. Key drivers of this growth include enhanced transparency and consumer trust. Online platforms like Chrono24, WatchBox, and Watchfinder have become instrumental, providing essential pricing information and fostering a more transparent market. Certified Pre-Owned (CPO) programs, such as those initiated by Bucherer, have further strengthened confidence by offering authenticity certificates and warranties, crucial for securing transactions in the pre-owned market.

In 2021, pre-owned watches represented US $22 billion (almost AU $34 billion), making up one-third of the luxury watch market’s total value of US $75 billion (AU $115 billion). This surge in the pre-owned sector is partially driven by younger generations, including Gen Z and millennials, who have significantly increased their spending on luxury timepieces. 

Investment Potential and Market Trends

Luxury watches have become a standout investment class, frequently surpassing traditional assets in performance. A Deloitte study reveals that rare and highly sought-after watches have seen annual appreciation rates of up to 20% from 2018 to 2023, outstripping the 8% increase in the S&P 500 during the same period. By 2030, the pre-owned luxury watch market is projected to reach CHF 35 billion, underscoring its growing significance as a lucrative investment asset.

High-luxury brands are highly regarded for their strong investment potential. Notably, a Patek Philippe watch acquired between 2017 and 2022 could have achieved a substantial return. This impressive performance, even amid economic challenges, underscores the attractiveness of luxury watches as a robust investment option with significant financial rewards.

Key Factors Influencing Value

• Craftsmanship and Brand Legacy: Superior craftsmanship and the historical significance of a brand are crucial to a watch’s value. Brands like Patek Philippe and Audemars Piguet are celebrated for their exceptional artistry and heritage, which significantly enhance their investment potential.
• Scarcity and Uniqueness: The value of limited edition or discontinued models from these prestigious brands tends to rise due to their rarity. Collectors and investors highly prize these unique timepieces, often driving up their prices.
• Iconic Status and Historical Significance: Watches with notable histories or previous celebrity ownership are highly sought after. Models featuring complex mechanisms like chronographs or perpetual calendars are especially prized. The iconic status and historical relevance of a watch can greatly impact its market value.

Market Dynamics

The luxury watch market offers various entry points for investors, from US $1,000 (AU $1,535) for entry-level models to US $10,000 (AU $15,360) or more for high-end pieces. The most attractive investment range typically falls between $10,000 and $15,000 (AU $15,360 and $23,040), offering a balance between affordability and potential returns.

The shift towards online sales, expected to account for nearly 60% of the market by 2026, is enhancing accessibility and liquidity. Digital tools and blockchain technology are also improving transparency and authentication, facilitating more informed investment decisions.

The luxury watch market is thriving, with growing interest in both new and pre-owned timepieces. Luxury watches present compelling investment opportunities, with strong appreciation rates and resilience in various economic conditions. Understanding factors such as rarity, craftsmanship, and brand legacy is crucial for making informed investment choices. Whether you are a seasoned collector or new to luxury watches, the sector offers unique and rewarding avenues for investment.