The smart way to tick up cash of luxury watches rockets

Despite looming budget cuts, the appeal of luxury timepieces has never been greater, as investors increasingly seek tangible assets as an alternative to stocks and cash.

According to data collector WatchCharts, the value of the most sought-after luxury watches has risen an average of 64 percent since the beginning of 2020.

The FTSE All-Share Index, a barometer of UK stock market performance, has fallen 9 percent over the same period.

Nicola Whittaker, manager of the watch division of auctioneer Fellows, says: ‘Investing in vintage watches is no longer the preserve of the old boys’ club. Today, young people increasingly see them as a smart investment that they can turn to in times of uncertainty.’

He adds: ‘Women are also attracted to timepieces as beautiful jewelry. This growing demand has contributed to the rise in watch values.”

There is a hardcore watchmakers that excites investors. The biggest name is Rolex, but Patek Philippe, Audemars Piguet and Vacheron Constantin are also very popular. Other sought after brands include Omega, JaegerLeCoultre, Breitling, Breguet, A Lange & Sohne, Cartier and Tag Heuer.

The brand is just the starting point, as each watchmaker offers numerous models to suit all tastes – as well as wallets. The market for practical, luxury watches was born 96 years ago when Rolex introduced the groundbreaking Oyster. This was the world’s first waterproof watch – promoted as ‘the wondrous watch that defies the elements’.

Richard Smith, manager at watch retailer Blowers, says: “Rolex is still the name that attracts the most attention from investors, with models such as Daytona, Sky Dweller, Day-Date and GMT-Master II remaining at the top of their wish list.”

The value of many watches rises before they reach the store. For example, the Rolex Daytona costs £12,600, but buyers are willing to pay £28,000.

Charles Tian, ​​founder of WatchCharts, says, “Luxury watchmakers are smart in marketing, releasing limited edition watches. You can’t just go to a store and buy a new watch.

“Instead, you have to get on a potential buyer’s waiting list. Such lists are usually only accessible to favorite customers – individuals who have bought from them before and will buy more than one watch.’

It means that if you’re in the mood for a new luxury timepiece, you might be struggling to get your foot in the door.

Even favorite customers can be on a waiting list for at least five years. Blowers’ Smith says, “The challenge customers face in getting a brand new timepiece has fueled the vintage watch market. In the past five years, the price of the best older luxury watches has risen by as much as 20 percent. We expect this trend to continue.’

Investors scouring the pre-owned watch market can still find bargains. Smith says a three-year-old Rolex Perpetual DateJust with blue dial in pristine condition can be found for just £9,000.

This compares to a retail price of £6,600 – if you’re lucky enough to get your hands on one. If prices continue to rise as expected, it could be worth five figures in a few years as demand exceeds supply. While investment-grade watches are often sturdy Rolex timepieces, Smith says the watchmaker’s skill is also key. He adds: ‘Makers like Patek Philippe make timepieces with a clear back where you can see all the timepieces.

‘These are often made of scratch-resistant sapphire glass, so they don’t get damaged.’

One of his favorites is a five-year-old white gold Patek Philippe annual calendar that sells for £50,000. The new retail price of this watch is £46,000.

Those without such deep pockets might consider a 1970s timepiece. There are still relative bargains to be found from this once unloved era. During this decade, traditional wristwatches went out of fashion as cheap digital watches became mainstream.

One of the first digital examples – the Hamilton Pulsar ‘time computer’ as worn by the actor Lee Majors on the 1970s hit show The Six Million Dollar Man – can sell for as much as £1,000.

Smith says: ‘During the 1970s, the way people wore watches changed dramatically – with many preferring a cheap timepiece over a classic old watch. But if they are rediscovered, the prices will go up.’

He adds: “Today, the modern smartphone is being used like the old pocket watch, with people taking it out to check the time. The traditional wristwatch is therefore no longer a necessity to check the time, but is increasingly worn as a luxury accessory on special occasions.’

This appeal of wearing a sophisticated piece of art on your wrist that doubles as a piece of jewelry attracts female investors.

Whittaker of Fellows says, “Female celebrities help make certain watches more attractive and increase their value. For example, the Princess of Wales wears a Cartier Ballon Bleu, while Princess Diana used to love having a Cartier Tank Louis on her wrist.

‘These are beautiful timepieces that are also practical.’

A Ballon Bleu diamond watch that retails for £12,700 can fetch over £16,000 on the pre-owned market. A small gold Tank Louis can cost £8,800 new, but second hand can sell for as much as £10,000.

Condition is key when it comes to investing in a vintage timepiece – most watches rely on over 150 intricate parts to make them work. That is why it is best to buy face-to-face from a specialized dealer who can give you a 12-month warranty on any defects.

Ideally, the price you pay for a watch should include the cost of a service. A luxury watch must be serviced at least every five years.

Whittaker says: ‘Unfortunately, the vintage watch market is flooded with counterfeits and so-called Frankenstein watches that look fine on the outside, but whose internal mechanisms are not original. A professional watch dealer checks the origin of each watch.’