What is happening with Rolex's quotations?

The allure of luxury watches, especially those from Rolex and Patek Philippe, has always been tied to their rarity and the craftsmanship with which they are constructed. However, recent market dynamics have painted a different picture: prices of these and other high-end watches have hit a more than two-year low. This price drop reflects the more general cooling of the luxury turnover: as the world grappled with uncertainties brought about by the lockdown, there was indeed a surprising surge in demand for luxury goods that infiltrated the world of luxury watches. However, three years into the pandemic, a mysterious slowdown in sales has occurred. The Bloomberg Subdial Index, a reliable metric that tracks the prices of the 50 most traded watches by value, recorded a 1.8% decline in October, reaching its lowest point since 2021. Over the last 24 months, this index has witnessed a decrease of 18%, indicating a pronounced shift in the dynamics of the luxury watch market. The downward pressure in the market, as highlighted by Christy Davis, co-founder of Subdial in London, suggests the possibility of further price depreciation as dealers adjust valuations to stimulate sales. According to Fortune: «Since a high in the secondary watch market last April, prices have dipped by a whopping 42%, Bloomberg reported. During the same period, Rolex and Patek prices have fallen 27% and 47%, respectively.».

Amid macroeconomic fluctuations, persistently high-interest rates, and inflation, major Swiss manufacturers have seen their status as unshakeable pillars of luxury questioned. Specific models, like the Rolex Daytona 116506, have seen a 17.5% decline in the last year, currently priced at $96,181 compared to $185,464 during the peak in April 2022. Patek Philippe prices, on the other hand, have decreased by 47% from the peak, with the Nautilus Travel Time 5990/1A-001 model experiencing a 20.5% decrease in the last 12 months, currently priced at $116,016 compared to $271,923 in March 2022. The Subdial platform reported a 5% increase in used luxury watches available on the secondary market since August, accompanied by an 8% increase in the average number of days needed to sell a watch, indicating a growing discrepancy between supply and demand, as well as an increase in price uncertainty. For a long time, the secondhand market for luxury watches has filled the gap due to the difficulty of buying new models with slow production and extensive waiting lists. Strangely enough, this could be a good time to invest, especially as experts warn that prices could continue to decrease. Christy Davis told Daily Mail: «With more watches available at a wider spread of prices, what we're seeing is people dropping prices to chase sales going into the holiday season».