As with so many other luxury good items, prices of Rolex’ and Patek Philippe’s soared in the post-COVID world. Given the amount of money printed all over the world, investors and retail buyers were looking at luxury watches as an asset class that may protect their capital from the inflationary pressures building up. After all, prices of metals such as gold and silver had also gone up quite a bit. But now we are seeing some reversal in those trends.
The stock market has already entered a bear market territory earlier this year and many individual stocks have lost 50%, 60% or even more. Crypto prices are also down dramatically. Bitcoin is down close to 70% from its peak last November. Based on data from the online-watch trading platform Chrono24, Bloomberg is now reporting that the market is getting flooded with Rolex and Patek Philippe watches, resulting in a significant cooling of the market. Trading volumes have gone up more than 50% in a short period of time. Specifically, there is an observed correlation between prices of crypto currencies and those of luxury watches. When crypto prices were sky-high, many will likely have realized their dream of owning a famous luxury watch and now that prices have come down substantially, these buyers may be thinking about selling to have more liquidity.
According to the Bloomberg article, the price of a Patek Philippe Nautilus 5711A – selling for ca. $35,000 on a retail level – went all the way up to $240,000 but has since then come down significantly to roughly $190,000. Obviously, this is still significantly higher than the prices paid for the watch before 2020 but if the watch market will ultimately follow the stock market or prices of crypto currencies, people who follow the trend may soon get their favorite watches again at reasonable prices. So pay attention if you are thinking about buying a luxury watch!
Images courtesy of Patek Philippe
