Written by: Taranjit Singh
Date: 27-11-2023
Current Market Trends:
The Bloomberg Subdial Index monitors the values of the top 50 sought-after secondhand watches, including iconic brands like Rolex, Patek Philippe, and Audemars Piguet. Notably, the Rolex Submariner with a green bezel experienced a 4.6% decline, while the yellow gold Rolex Day Date saw a rare 1.3% gain.
Despite the 10% dip being less severe than the previous year's 40% drop, industry experts caution against complacency. Subdial's insights mirror the broader trend in new Swiss watches, which saw a decline in exports for the first time in over two years. Although transaction volumes remain steady, falling prices in the secondhand market hint at shifting dynamics.
Market Dynamics and Influences:
The current situation stands in stark contrast to the post-pandemic surge when low supply and external factors like social media trends and crypto's meteoric rise triggered a buying frenzy. The Bloomberg Subdial Index suffered a 42% decline from its peak in April 2022.
A Potential Turning Point:
Subdial identifies a potential positive catalyst for the watch market in the future interest rate environment. The report notes a correlation between the watch market's decline and the Federal Reserve's rate hikes. As the likelihood of further rate hikes diminishes, optimism surfaces within the market.
Looking Ahead:
While traders are already pricing in the first Fed rate cut in May 2024, watch enthusiasts are advised to keep an eye on local Rolex dealers. The market's downturn may create unexpected opportunities, such as rare models becoming available due to canceled purchases.
Conclusion:
The luxury watch market, particularly Swiss timepieces, is experiencing a notable shift. Investors and enthusiasts alike are presented with a unique window to acquire iconic watches at potentially lower prices. As the market adapts to changing economic factors, the allure of owning a Rolex or other high-end Swiss watch may become more attainable for those who seize the opportunity.