What Makes Luxury Watches Lose Value?

A cynic knows the price of everything and the value of nothing!

I buy for design quality and beauty to me ( the beholder). 6 months on I sometimes wonder wtf? Why did I like that rado world travel?

I heard U.K. taxman suggests that cost ownership vs appreciation is so low that they don’t see huge gains on watches.

Its just like any other antique 30 yrs ago people wanted high quality mahogany and walnut furniture dining chairs and table and a solid silver Georgian dinner service.

No one wants that any more. They want shabby chic.

I don’t care - top materials and design will come good in the end . Ride the wave

I think the biggest factor causing watches to lose their value is the lack of a crown logo and brand name starting with an R on the dial.

😉

Buying them and walking out of the store.

... and actually wearing them. Perhaps even in the rain. In a sketchy neighborhood at night.

Yes, clairvoyance would be required. They make so many limited editions and most do no better as investments than the standard version. If you are able to pick out the one that will skyrocket in value, my congratulations and you absolutely deserve whatever money you make.

Invest in your happiness, and buy to wear and own. Not losing money is the best I’d ever hope for, that’s why I choose to buy preowned.

I’m ok with a break even. I am not buying as investment but as a fan hobby.

I only trust Rolex stainless steel for gaining value on my budget. There are many above them but I can’t afford them.

for the rest it’s a matter of how much I like it. If I get a great watch and enjoy it for a few years and then sell it for a 29 to 4% loss I’m okay with it. It’s like a time share to me.

I am ready to lay for what I like. If I have to think about value and ROI etc etc then it becomes work …. And I would then need another hobby to decompress.

My markers for investing in a time piece boil down to what you mentioned from the Bob's watches article. Which is basically how unique is the piece in comparison to the rest of the catalog at the time it was produced? and how rare was the piece overall? One modern example for me is a watch with an enamel dial such as Patek Phillipe 5231J Yellow Gold Cloisonné enamel dial. As far as I know enamel dials are only produced in Switzerland by one supplier. I believe you have to be an approved buyer for a PP AD to sell this to you. Retail price is $79250. In the US where I live after tax the watch is $86580. least expensive example on C24 today in the US is $107500 and I would still have to pay tax on that price. When this watch goes out production the price will be??? There are many other examples of watches produced in low numbers that appreciate, but also many produced in low numbers but will be worth less than MSRP. The more unique the watch is from it's catalog mates the more likely to appreciate. Also buying and holding a unique low volume limited edition piece that remains unworn, is a complete set is also another way to increase resale value. Look at some of the Speedmaster LE prices over the years.

PP 5231J

Ok, firstly, HUGE disclaimer before making my post: I am not into this hobby of wristwatches because I see them as an investment, but truly because I see them as something closer to pieces of art, tangible examples of what craftsmanship and ingenuity can yield and/or a romantic connection to countries that are dear to my heart.

Ok. Having made this important point, I would then argue that, clearly, some people have been able to make (very) successful investments into collectible (as defined by "the ones that appeal to the market and generate demand") watches.

Whether it was because these investors were prescient, savvy, lucky or cunning (these who manipulate the market by creating artificial scarcity, eg), no matter what, one can not argue with the fact that the prices of many luxury watches have significantly increased over the last 10 years or so (which among other thing, is correlated with the ever more readily available information on these pieces, the advent of social media and the never ending wealth gap at the top -stimulated by low interest rates-).
And I am not just talking about Rolex watches, although that is one of the obvious examples, I am talking about almost universally across the board, sadly, including the mighty Speedmaster.

So, whether we like it, or not, watches can be an investment for some and it is undeniable that they can be treated similarly to stocks, collectible cars, commodities, etc.

So what could influence some "positions" to climb, while others will fall? THIS is OP's question (at least IMO).

To add and build on what others have said before, here are some elements that I do believe will influence the prices of wrist watches:
- aesthetic quality of design: I think this is self explanatory... but beauty is in the eye of the beholder... so go to the next point...
- Tastes (of collectors/buyers) do change: From bubble backs, to pocket watches, to yellow gold watches, to two-tone watches, to steel sports watches today, there clearly have been trends (and I am sure that the long timer on this OF will be able to point to other trends I will have missed). Interestingly, these trends may be cyclical, so up to you to define the period or frequency they cover, but also up to you to define what may be able to disrupt the trends.
- Top horological quality as defined by high end complications and/or quality of finishing, does not seem to ever go out of trend, and though, the holly trinity brands and today some indépendants watchmakers, always seem to be the ones that stay on top long term.
- (perceived) Rarity. No need to say more, but models for which a very limited and finite number of examples exist, for example, will likely command a higher price than a model that is readily available. Besides the number, it could also be due to the materials used, etc.
- Popularity as in: worn by a celebrity (eg, Paul Newman), linked to a historical moment (eg, Moon landing), linked to a popular sport (eg, Submariner), emblematic of a lifestyle that people are trying to live through (eg, dive watches or GMT watches, military watches, etc).
- Purchasing power of a generation vs. What was cool when this generation grew up: goes back to the cyclical nature of most collectibles.

...and probably more, but I need to go sleepies now. 😁

I suspect there are 2 different ends to the investment market with the most obvious and glamorous (to some) is the high end top price watches ie Rolex, Phillipe Patek and similar but there is another end that can make money too and thats the well worn cheap watch end where I am not afraid to dip my toes into as its a low cost outlay but has seen some remarkable price increases in the last 2 to 3 years.
Some watches that 3 years ago I was picking up for $50.00 plus and minus I can no longer get for under 150 to 200, that's a lot of gain and I don't see that slowing down any time soon.

…that they were the cutting edge of technology and what the future would look like… until they weren’t.



That doesn’t stop them being incredibly cool and very pretty though! 🥰

To show how fickle the world of “investment” watches is… how about this guy?



These did not sell. No one wanted them. Lots ended up in the grey market as dealers offloaded old stock. Even CostCo had a few.

And now they sell for multiples of the original retail price. Anyone that tells you they knew this would be an “investment” in 2013/14/15 isn’t telling the truth.