Story Highlight
– Patek Philippe prices rose 19% over the past year.
– Value retention scores for Patek Philippe show significant variation.
– Nautilus and Aquanaut watches command steep premiums.
– Rolex watches maintain high secondary market value retention.
– Audemars Piguet achieves balance across its product offerings.
Full Story
Market dynamics for luxury watch brands, particularly Patek Philippe, Rolex, and Audemars Piguet, are under scrutiny as recent reports reveal varied trends in secondary market pricing. Despite an influx of tracking tools, discerning the true value of these timepieces remains a challenge reminiscent of the market’s earlier days a decade ago.
Morgan Stanley, in conjunction with WatchCharts, recently released findings indicating that average prices for Patek Philippe watches have surged by 19% over the past year, resulting in a value retention score of +15.4%. Value retention reflects how secondary market prices for current production watches compare to their retail values.
Conversely, the data aggregator EveryWatch reported a more conservative increase in median prices for Patek Philippe at 10%, with a value retention score at 75.4%, marking a slight decrease from the previous year.
Joshua Ganjei, CEO of Boston’s European Watch Company, observes a stark contrast in market behaviour. He notes that timepieces created under former CEO Philippe Stern (1993-2009) are experiencing price appreciation, while those manufactured under his son Thierry current leadership are being sold at significant discounts. “The numbers are clear. New Patek Philippe grand complications are trading at roughly fifty percent of MSRP on the secondary market,” Ganjei stated.
These differing evaluations of the Patek Philippe market do not inherently conflict; rather, they arise from distinct methodologies and datasets. Morgan Stanley employs a weighted average based on model sales volume, focusing on 180 in-production watch models, predominantly from the Nautilus and Aquanaut collections, which represent significant secondary market activity. In contrast, EveryWatch’s analysis spans 196 references without volume weighting, capturing a broader range of models.
The data reveals a disparity among various collections, with Patek Philippe’s Calatrava and Complications series trading at steep discounts, both reflecting -34% value retention. Meanwhile, more sought-after models like the Nautilus and Aquanaut command considerable premiums, boasting value retention scores of +74% and +90%, respectively.
For many consumers, understanding value retention is crucial when purchasing from official retailers, particularly as building a desirable customer profile often involves starting with less sought-after models like the Calatrava. This leads customers through a hierarchy of purchases, ideally culminating in more prized models. However, with approximately 52% of Patek Philippe watches showing positive value retention, customers face potential losses on foundational purchases.
This decline in appeal for particular models poses risks to Patek Philippe and its network of dealers. Should the supply of less favoured watches like the Calatrava exceed demand, they may enter grey market sales at reduced prices, potentially diluting interest and creating a cycle of reduced demand.
In stark contrast, Rolex reports that around 76% of its models maintain or increase their secondary market value. Morgan Stanley noted that while some references like the Air-King and Sea-Dweller are priced below retail, high-demand models such as the GMT Master and Daytona report significant value retention, indicating a well-structured balance within Rolex’s portfolio.
Audemars Piguet, too, displays a more diversified approach compared to Patek Philippe, with 68% of its references selling above retail and an average value retention of +36%. Reports show that, unlike Patek Philippe, Audemars Piguet manages its supply effectively across its popular collections.
The contrasting market positions of these luxury brands signal potential shifts in consumer behaviour. As observed by EveryWatch, while Rolex demonstrates both breadth and upward momentum, Patek Philippe’s recent performance highlights vulnerabilities that could impact its desirability and market longevity.
As the luxury watch landscape evolves, understanding the nuances of value retention and market dynamics will remain essential for both collectors and industry analysts alike.
