2022 Luxury Watch Market Retrospective
By: Preston Turk | Posted: January 31, 2023
The Luxury Watch Market in 2022
In 2022 we saw a white hot market for luxury watches, driven by a number of factors.
During the Coronavirus lockdown periods, more buyers stumbled upon watch collecting via social media channels which provided nearly endless amounts of information and news about watches for them to self-educate extremely quickly.
By 2022, this resulted in a high number of new, educated buyers entering the watch market and hungry for exclusive pieces from top brands like Patek Philippe, Audemars Piguet, and Vacheron Constatin, among others.
In parallel, the stock, property and even automobile markets experienced tremendous growth as capital sought returns in the face of an increased money supply and low interest rates. As collectors, speculators and the general population are aware, the luxury watch market experienced growth in lockstep with these markets as watches began to function as an asset class.
Following the interest rate increase in March 2022, and the following six increases throughout the rest of the year, economies around the world slowed down and many asset prices, including luxury watches, were impacted.
This presents us a unique opportunity to see which brands and watches have held their value the best against one of the most significant global economic slowdowns and consider possible expectations for the market in 2023 as China’s consumers return to a stabilizing global economy.
Watches with the most resilient values through 2022:
Below we will take a look at the top luxury brands and their performance, which for this purpose is defined as the change in the market value of their products available on various global watch marketplaces. We will look at this on a brand-by-brand perspective and look at the performance of a handful of individual models whose values showed particular resilience across 2022.
Rolex
Like most brands, Rolex values were extremely strong up until March 2022. The brand overall experienced a -13% YoY change in trading values from January 2022 to January 2023 today, which is worse than many luxury brands.
As for why this is, it may be attributable to there being many more Rolex watches in the world. Rolex does not disclose their production numbers, however public estimates are around 1 million watches per year, as opposed to 62,000 for Patek Philippe. This could mean that because there are simply many more Rolex watches out in the world, and not all of them are hyper-collectable, the overall market value is more susceptible to macroeconomic changes than smaller brands.
From the current Rolex lineup, the Datejust reference 126234 with blue dial and fluted bezel was the most resilient, experiencing less than -1% change in market price in the past year and still trades at a premium above retail price.
Right up there with the Datejust is the yellow gold Rolex Day-Date 228238 with Silver Motif Dial, which suffered only a -6% change in value over the year and also trades above retail price.
Patek Philippe
Collectors have a phrase: “Patek is Patek,” which means that nothing can truly match the history, products, and lasting consistency of this family-owned brand. The brand’s year-over-year valuation is no different, in that the overall market value for Patek Philippe watches has only changed by -2% in the face of a dramatically different market condition to January 2022.
Of the current models trading, the Nautilus Flyback Chronograph Travel Time 5990/1A increased in value +14% year over year.
As for non-sports watch models, the Annual Calendar 5205 in white gold experienced an increase of +4.9%, while the Salmon Dial 5270P in platinum went up by +18%.
Audemars Piguet
The market price for Audemars Piguet’s products overall changed by -7%, which is still less than the change to the S&P 500 index over the same period (-18%).
As for the best value retention in this brand, we see that Audemars Piguet is innovating with new product lines such the Code 11.59 series, however it is still the Royal Oak which the market demands.
The Royal Oak Double Balance 15407OR in rose gold still gained 1.9% over the year, the best for an existing production model, with the Royal Oak Chronograph 41 26331OR in pink gold a close second at a change of only -6%.
Vacheron Constantin
The most recent market rally craved stainless steel sports watches with integrated bracelets, and while Patek Philippe and Audemars Piguet had the most demand, Vacheron Constantin deserves to be highlighted for their own history with this genre of watches via the 222 and Overseas collections.
Collectors appeared to agree, which helped the brand increase by +4% year-over-year and in particular propelled the Overseas reference 47040 in stainless steel with white dial to a +40% increase.
A newer reference, Overseas Dual Time 7900V in stainless steel with black dial, also performed well at an increase of 5% year-over-year.
Efforts from Vacheron Constantin to continue innovating also look to be rewarded by the market, with the majority of the FiftySix series of casual dress watches having increased in value between +4 and +18% for the year.
Honorable mention:
Girard Perregaux
It is worth noting that the demand for stainless-steel integrated bracelet sports watches impacted brands that are in the more affordable range as well, such as Swiss watchmaker Girard Perregaux, who experienced a +30% increase in the market value of their products, a change which held steady through the second half of this year.
Their Laureato series was the most resilient, with the Laureato in stainless steel and blue dial reference 81010-11-431-11A experiencing a +30% increase year-over-year.
A. Lange & Sohne
Across the border from Switzerland in Germany, A. Lange & Sohne has been, in some ways, a “best kept secret” for quality and design beyond collector communities. However, their tireless efforts to put out good products were not ignored by the market, and the value of their products increased by +12% over the year and most notably it has not experienced a slide as many other brands have in the last 6 months.
This could mean the brand has increased its staying power and we are seeing a new contender from outside the “Holy Trinity” of Patek Philippe, Audemars Piguet and Vacheron Constantin who is here to stay.
Among the models from A. Lange & Sohne, the Zeitwerk reference 140.032 in pink gold with white dial achieved an astonishing +29% increase in value over the year.
We would be remiss not to mention the brand’s own integrated bracelet sports model with blue dial, the Odysseus 363.179, which achieved an impressive +31% in market value.
2023 Outlook
As we know, the most in demand luxury watch collections such as the Patek Philippe Nautilus and Audemars Piguet Royal Oak, among others, continue to be on waiting lists and trade at a premium over the retail price due to demand far exceeding the supply.
While these waitlists are challenging for collectors, brands are being cautious not to invest too much in production capacity and flood the market with product which could potentially put their company at risk in the long term. A healthy brand is a sustainable brand, and by being careful about what products they launch and how many they produce, brands can ensure they are able to support their customer base and remain in operation for years to come.
On a higher-level outlook for 2023, inflation is currently slowing which is improving the prices of consumer products. In response, the US Federal Reserve has indicated they will continue with their plan to raise interest rates but do so at a slower rate and potentially hold those rates for a longer period, which appears to have had a stabilization effect on stocks and other assets.
In parallel, China announced this month it is reopening its borders to the world after 3 years of isolation. This opening means a significant number of Chinese collectors and consumers will be free to travel and spend around the globe, including on luxury goods such as watches, however a lift in Chinese domestic spending is also expected.
The markets seem to have agreed that this is a positive development, with Swatch Group’s stock hitting the highest point in over 2 years shortly following the reopening and the group’s subsequent announcement that they expect sales to recover this year “in all regions and all segments.” While Richemont Group and Breitling did not give a specific financial outlook, both companies also made public statements expressing a positive outlook on revenues due to China’s reopening.
In summary, as the luxury watch market has tracked closely with assets such as property and securities which are stabilizing, it appears we closer to or already in a period of normalcy for watch values. What this means for collectors is the potential for greater confidence on the market price for their current collections and predictability on what they might expect to spend for new acquisitions this year.
(The above report was created using data provided by WatchCharts.com)
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