The secondary market for luxury watches will continue to weaken in the short term, and Rolex is expected to be the most affected. The secondary market for luxury watches is expected to weaken further in the short term as competition between dealers intensifies and increasing inventories push prices downwards.This was stated by industry commentator and investor Danny Younis. He confirmed that it is currently undoubtedly a “buyer’s market” – with Rolex the most vulnerable to the current downward trend in prices.Launching Watchpro on Thursday (4/7), in his upload on LinkedIn, Younis, who monitors the direction of the luxury watch sector closely, noted that the secondary market had dropped to its lowest level in more than two years due to a slowing economy, higher interest rates, weak consumer spending, and the fall of the crypto market. He said the background of falling prices was also triggered by an increase in supply, especially true for used Rolex watches.
The market is still volatile Younis said Rolex’s resale price peaked in March 2022 due to the surge that occurred during the Covid-19 pandemic. However, the Rolex WatchCharts index, which benchmarks 30 models, recorded a decline of up to 31 percent since its peak and has dropped 9 percent so far this year.Similarly, the Bloomberg Rolex Market Index has recorded a decline of 40 percent. Since mid-2022, the number of new Rolexes in boxes (nibs) sold on the Chrono24 marketplace has doubled from 19,000 to over 38,000 now.”This increase in supply was mainly due to much lower sales, as registered volumes fell slightly year over year while volumes sold fell more,” he wrote.This, Younis said, suggests in the short term, the market will continue to weaken as competition between dealers intensifies and inventories increase which will continue to push prices down.
Some models are still in high demand in the reseller market, especially the SS Daytona & GMT Master II ‘Pepsi’.
However, there are models that are constantly falling in price.”You can now buy some Rolex models on the resale market for lower than retail prices, especially some Subs & Sea-Dwellers that are down and no longer hunted by hysterical teenagers (even the desirable Hulk that cost US$28k two years ago is now trading as low as US$17k)”Younis admits that used Rolexes are still up 25% to 30% compared to before Covid – and 70% since 2017. However, he said it was important to provide some “context”.”In 2023, Rolex produced more than 1,230,000 watches – that’s more than double the next 11 largest luxury watch competitors combined, including Patek, Vacheron, Jaeger, IWC, A. Lange, Breguet, and so on.
According to him, there are about 3,400 watches every day of the year, or two watches every minute of the day. However, you won’t find many at official Rolex dealerships that are just for show-off–except for the flashy gold models that no one wants that lose their value as soon as you step out of the boutique.This is all part of a strategy to artificially limit supply and shore up demand (and prices: the second increase is already implemented in 2024. “It is estimated that there are more than one million Rolexes currently on sale across multiple resale channels,” Younis said.