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The secondary market for Rolex watches has sunk!
The luxury watch industry, particularly Rolex is facing its most significant crisis in the past two years due to the Fed's decisions, leaving experts and consumers questioning the future of the luxury watch boom.
By: The Luxury Hut
Since late 2022, Wall Street was clear with predictions for the Fed's impact on the stock market and overall economy. But while the economy has put up with the fluctuations surprisingly well, the secondary market for luxury watches is in turmoil.
According to the WatchCharts Overall Market Index speculating the prices of 60 timepieces from top watch brands like Rolex, Audemars Piguet and Patek Philippe, the graph has plunged from a stiff March 2022 peak to a 32% drop. Rolex, being one of the top names has a downfall of 27%.
Market experts believe that the US central bank's crude monetary tightening over the past couple of months is a key reason for the dramatic slump in prices. The increasing interest rates have instilled fear of an economic downturn further instigating investors to restrict luxury spending and boost savings. Additionally, the fall in the crypto market has also contributed to the pivotal shift in luxury watch demand.
Ever since the Fed started increasing the interest rates in March 2022, luxury watches have underperformed stocks raising concerns amongst investors. Reports of the WatchCharts data show that the Rolex Market Index comprising the 30 most notable models is down by 12.5% for over 12 months while Patek Philippe is hurt by 18%. However, the brand facing the sharpest loss is Audemars Piguet with almost 20% year-on-year downfall. (https://www.theluxuryhut.com/
This comes as a major blow as during the pandemic everything was in full rally and surplus cash by piling over the alternate investment options, including luxury timepieces. The prices for Patek Philippe, Rolex and Audemars Piguet reached an all-time high at the beginning of 2022. In 2021, the pre-owned watch sales had touched $22 billion which is approximately one -third of the entire $75 billion watch market.
Despite the recent declines, the prices for luxury watches have climbed over the past year and considerably over the longer term, surpassing the stock market. The Rolex index is up by over 55% in the last five years. This concludes that luxury timepieces have performed well in the long term. (https://www.theluxuryhut.com/
The Luxury Hut