The prices of luxury watches are witnessing a dramatic fall… What is happening?

Analysts at Morgan Stanley said, The prices of the most popular watches, such as Rolex Patek Philippe and Audemars Piguet will decline further as the market is flooded with supply.

After soaring in 2021 and during the first quarter of 2022, the index of the most popular models from Daytona maker Rolex – tracked by WatchCharts – has fallen 21% since the market peak in April. Prices for Nautilus models, which are manufactured by Patek Philippe, have fallen by an average of 19% in the secondary market while those of Audemars Piguet’s Royal Oak have fallen by 15% since the peak.

In a recent report, Morgan Stanley analysts, including Edward Oppen, argue that prices will likely continue to fall due to a “dramatic” increase in supply.

“We have observed a significant increase in watch inventory in the general secondary watch market thus far as a result of used watch dealers and retail investors unloading their inventory,” Morgan Stanley wrote in the report.

“Given the current inventory of watches available for sale and the deteriorating overall background, we expect secondary market watch prices to contract on a quarterly basis from here on out,” the analysts said.

The most sought-after models from the “Big Three” – Rolex, Patek and Audemars Piguet – represent 71% of the total value traded in the secondary luxury watch market. The prices of the overall market index of WatchCharts, which includes other brands, decreased by 9% in the third quarter of this year compared to the second quarter, according to “Bloomberg” and seen by “Al”

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The report identifies a few Swiss watch brands that are bucking the trend of lower prices. Even with the lower prices of Rolex and Patek, LVMH-owned Bvlgari models rose 1%, the price of A. Lange & Sohne from Richemont rose 3%, and the Girard Perregaux brand rose 5%.

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