By: Serach Nissim

Preowned luxury watches are turning into hot collector’s items, and it’s no wonder.

As reported by the Wall Street Journal, pricey secondhand watches from top brands including Rolex, Patek Philippe, Audemars Piguet and Richard Mille have gained popularity in recent years, and not just for their value as a coveted accessory.  The used watches have become a solid investment, able to hold their own against inflation and effective as a means of diversifying a portfolio of holdings.  In fact, the second-hand watches have beat out the overall stock market, adding about 20% annually in value from mid-2018 through this January, as per data published by Boston Consulting Group.  In comparison, the S&P 500 index grew about 8% annually during that same period.

A March report by BCG says that the high-end used watches have become an increasingly popular investment in recent years, especially luring younger buyers.  As the demand has grown and the supply has remained constant, the prices for the second hand watches have increased.  Often collectors pay double or even triple the price for a preowned watch, even one that just left the store, said Nicolas Llinas, a principal consultant in BCG’s consumer-practice division who helped write the report. For example, Rolex Cosmograph Daytona watches with a retail price of $14,800 recently sold on secondhand platforms such as WatchBox for as much as $38,500, as per BCG.

The demand for second hand watches also jumped because new luxury watches became so hard to buy during the pandemic, when manufacturers closed their factories or slowed production.  Luxury watch stores now have years-long wait lists to deliver watches to pre-qualified buyers, and no guarantees are given as to when, or even if, the desired watch model will be delivered.  Second hand watch online platforms, such as Chrono24 and Watchfinder & Co. now make it safe and convenient for collectors to research, find and buy the watch models they want, as per BCG. Besides for the investment aspect, the luxury watches are also seen as a status symbol, can add to a person’s sense of style, and can be passed down as heirlooms, outlasting other collector’s items such as Baseball cards or now ailing cryptocurrencies.  BCG revealed that a basket of preowned watches also outperformed indexes which include art, handbags, and wine over the last decade.

While older consumers still prefer buying new luxury watches, Generation Z and millennials are more prone to purchase vintage luxury watches, said Mr. Llinas from BCG. He explained that this is because millennials generally approach their collections with a more business-minded point of view, and are also quicker to sell.  “They don’t get as personally attached to some of those watches,” said Llinas. “Sometimes they’ll resell a watch to get one that’s more coveted.”

As per the WSJ, in 2021 the global second hand watch market was estimated to be worth about $21.7 billion, which is close to thirty percent of the $75 billion global luxury watch market. By 2030, the second-hand global watch market may reach up to $37 billion, as per a study published in October by consulting giant Deloitte. “If you really want a watch and you’re super passionate about it,” said Llinas, “the only way to get the watch is through the secondary market.”