Watch market flooded with supply

Prices for the most popular pre-owned Rolex, Patek Philippe and Audemars Piguet watches will fall further as the market has been flooded with supply, analysts at Morgan Stanley said in a report.

After surging in 2021 and during the first quarter of the year, an index of the most popular models from Daytona chronograph maker Rolex tracked by WatchCharts has fallen by 21 per cent since the market peak in April.

Prices for the most popular Nautilus-maker Patek Philippe references are down an average of 19 per cent on the secondary market, while those for Audemars Piguet, the maker of the Royal Oak, have declined 15 per cent since the peak.

Prices will probably keep falling due to a “dramatic” increase in supply, Morgan Stanley analysts including Edouard Aubin said in the report.

“We have noticed a significant increase of watch inventory in the secondary watch market year to date as a result of second-hand watch dealers and individual watch investors off-loading their stocks,” Morgan Stanley said.

“Given the current watch inventory for sale and the worsening macro backdrop, we would expect second hand prices to contract further quarter over quarter.”