US Watch Chart Shows 31% Drop in Pre-Owned Watch Prices Compared to Last Year's Peak
Prices of luxury watches, which surged after COVID-19, are falling one after another in the secondhand market. With liquidity in major countries shrinking due to interest rate hikes and consumers tightening their wallets amid economic slowdown, 'Rolex,' once a financial investment tool, has become a burden for many investors.
Rolex Yacht-Master
On the 11th (local time), the Wall Street Journal (WSJ) reported, citing WatchCharts, a watch-specialized platform, that the average resale price of secondhand watches as of the 5th was $30,781 (about 39.7 million KRW), down 31% from the peak in March last year ($44,778, about 57.7 million KRW).
The resale price of Rolex watches, a popular luxury brand, fell 27% during the same period. WatchCharts releases a Rolex Market Index estimating the resale prices of 30 Rolex models, and the current price is $28,116 (about 36.3 million KRW), the lowest level since May 2021.
Charles Tian, CEO of WatchCharts, said, "As individuals put watches on the market, supply has significantly increased, leading to price declines," adding, "Many people who considered watches as an investment now want to liquidate their holdings."
Interest rate hikes in major countries are cited as the main cause of the decline in luxury watch resale prices.
After COVID-19, as market liquidity expanded, many people engaged in 'Rolex open runs' to hedge against inflation and for financial investment, driving up luxury watch resale prices. Luxury watch companies also did not significantly increase production to maintain brand value, further fueling the rise in resale prices. However, as the U.S. Federal Reserve (Fed) began aggressive monetary tightening steps from March last year to curb inflation, demand for secondhand watches plummeted.
CEO Tian said, "When interest rates rise suddenly, holding other investment assets like bonds is much more attractive than watches."
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