Luxury Watches – Has COVID called time on their value?
Watch collectors will be pleased to hear the news that favourites Rolex and Patek Phillipe have slowly started manufacturing again after closing their doors during Coronavirus. Despite both brands postponing their new releases for 2020, watch enthusiasts will now be keen to see what the Swiss watchmakers will be planning for their fans. How has the value of your watches been affected by Covid 19 and do you need an updated valuation?
Well, it’s certainly been a tumultuous time in the watch industry recently especially with the arrival of the pandemic coinciding with the mass exodus of key players from the infamous Baselworld exhibition. Big brands have jumped ship from their industry trade show organised by the MCH group and are now planning on taking part in a newly formed event, in cooperation with the Foundation de la Haute Horologerie, in Geneva in April 2021. So how does the current market sit for the valuation of watches?
The cost of time.
With travel retail nose-diving with the lack of footfall at airports, are people turning to the previously-owned watch market instead? Chrono24.co.uk, a leading second-hand watch website (who claim to sell over 10,000 timepieces every month across over 100 countries) say that their recent study into Rolex sales have seen a 4% rise compared to this time in 2019. Although a few models such as the Rolex Daytona 116500LN and Rolex GMT-Master II Pepsi 126710 BLRO are deprecating slightly, their re-sale values still sit some way above the listed value. Meanwhile others, such as the Rolex Submariner Date 16610 , Rolex Datejust 1601 and Rolex Air-King 5500 have all seen upward price trends making the average price of a second-hand Rolex experience a 5% rise.
The true affect of COVID may yet to be seen. What is clear however is that, like jewellery, luxury watches have a tendency to increase in value over time. This is supported by data from timerating.com, who track the value of watches. Their indications are that popular models from manufacturers such as Rolex, Omega and Panerai, have been increasing by an average of between 4% and 6% annually for the last 3 years, some by as much as 9%. Beyond this, the 2020 Wealth Report from Knight Frank, suggests that, as a market, the value of watches increased by 60% over the last decade. Whilst some years out perform others, the compound affect of these annual changes may mean your treasured timepiece is now considerably more valuable than when you first bought it.
To buy or not to buy?
With this in mind is now the time to be diving into the watch market? We spoke with horologist and Doerr Dallas valuer, Alastair Meiklejon. As an avid collector with over 150 watches, he doesn’t believe that we will see a post-Coronavirus knock-on effect to the watch market. “There’s rumour in the market that prices could drop by 20%. I simply don’t believe this. You can’t accurately portray what the market will do, but traditionally the second-hand watch market has been an incredible investment. Remember though – collectors never buy a watch as an investment – they are always keen to keep hold of them.” No doubt the lack of desire to sell is a big factor driving re-sale value, particularly for the most sought after pieces.
Despite the looming recession, the appetite for Rolex is still there so how does one go about buying their first Rolex? “Their marketing is incredible. Everyone wants the watch they can’t have. Rolex always produce just not quite enough which leads to a price increase on the second-hand market.” And for those who wish to buy brand new? “Good luck with that! You have to be in with your Authorised Dealer – it’s political and a little bit mad! You have to buy two watches from your Authorised Dealer to even be considered to buy a Mariner” and that’s if the dealer eventually gets one to sell of course.
The ‘Fakes’ which are just too good?
We can’t talk about watches and not mention the saturated ‘Fakes’ market. The quality of fakes these days seems to have long surpassed the days of the guy rolling out a beach towel to show his wares. Alastair told us “It has got a lot harder for the average collector to tell the difference between what is real and what is fake. Paperwork is cloned and with the advancement of 3D printing the reproductions of a new release can be made within 6 weeks. Luxury Italian brand Panerai refused to buy back any of their watches because they themselves couldn’t tell what was their own.”
Watch out for your collection.
Whether you own one or two luxury watches or you’re an avid collector, the advice in the current market is the same. “Clients need to know their items and insure them for the correct amount. Be wary of under-insurance.” Meiklejon usually carries out valuations in people’s homes but can currently give advice over the phone or video call; he and the rest of the team at Doerr Dallas are always on hand for clients of Lloyd & Whyte.
As a Lloyd & Whyte client, you can benefit from discounted prices on Doerr Dallas’ valuation service.
A time for reflection?
Watches worth buying are worth insuring properly. Luxuries like these aren’t bought every day and by their nature they can acquire value overtime. If you haven’t had your watches valued in recent years, please get in touch. We can provide guidance as to how your policy may react in the event of a claim and whether it’s necessary for you to get an appraisal. Remember – you can amend your policy at any time to reflect any changes that may be necessary.
Lloyd & Whyte. What matters to you, matters to us.
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