Luxury watches don’t have to be new to be a sound investment. The market for second-hand luxury watches is currently experiencing a boom worldwide.
According to the 2022 Frank Knight Wealth Report, luxury watch sales by leading auction houses have risen by 54%.
In this article, we cover:
- growth in the luxury watch resale market
- performance of luxury watches as assets
- trends in second-hand luxury watch sales
- factors driving the value of second-hand luxury watches
- getting a loan with a second-hand luxury watch.
Growth in the luxury watch resale market
The RealReal’s 2021 resale report states that customers are spending US$1,600 (R25,493) more on second-hand luxury watches compared to the previous year’s sales.
Online consignment retailer Fashionphile has reported a 73% increase in the search term “watch” on its site since 2020.
According to McKinsey, the pre-owned luxury watch market was worth US$1.8 billion (more than R28 billion) in 2018. It looks set to increase to US$30 billion (almost R500 billion) by 2025.
Performance of luxury watches as assets
Sales of luxury watches at auction were stronger than ever in 2021. According to the Knight Frank Wealth Report, total sales of watches topped £420 million (more than R8 billion) at auction worldwide.
Much like previous trends, buyers were predominantly from Hong Kong, outpacing sales in Geneva and New York by a small margin. In the Asian market, there has been an increase in interest from younger people.
Premier auction house Phillips saw its previous figures for autumnal Geneva sales almost double. A 64-year-old Omega Speedmaster, nicknamed the Tropical Broad Arrow, broke previous records by selling for more than three million Swiss Francs (almost R50 million).
Trends in second-hand luxury watch sales
Independent watchmakers, such as George Daniels, Roger Smith, Christian Klings and Philippe Dufour, are setting new sales records.
Rolex watches are seeing the steepest climb in value. Rolex Daytonas continue to increase in value the most, followed closely by Explorers and Submariners.
What’s driving the value of second-hand luxury watches
Availability is a driver of the value of luxury items. The top four luxury watch brands, Patek Philippe, Rolex, Audemars Piguet and Richard Mille, produce limited inventory to ensure exclusivity and quality.
Closures during the pandemic affected the supply of top brands, making them more scarce and even more desirable.
There’s also an uptick in the demand for luxury watches for women. Previously, the market was dominated by men’s watches. Fashionphile noted an increase of 92% in searches for “women’s watches” on its site since 2020.
There’s also a significant increase in interest from the younger generation. According to TikTok, luxury watch-related content generated more than 173 million views.
Finally, luxury resale websites are making it easier than ever for people to invest in luxury goods. This has helped boost the second-hand luxury watch market.
Getting cash for a second-hand luxury watch
Selling a second-hand luxury watch to get cash is always an option. Unfortunately, there are disadvantages, such as:
- long waiting time to find a buyer
- unlikely to secure the best price
- the risk of scams and crime when meeting buyers
- not able to buy the watch back.
A better option is to use the watch as collateral on an asset-based loan. This type of loan gives you quick access to cash based on the value of an asset like a luxury watch.
The watch is returned to you once the loan is repaid and your ownership is unaffected. The watch remains part of your investment portfolio.
For more information about using a luxury watch to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.
Asset-backed loans with Lamna
As well as loans against second-hand luxury watches, Lamna offers fast, discreet loans against the value of a wide range of assets, from jewellery and vehicles to artwork.
For more information about using an asset to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.
ILLUSTRATIVE EXAMPLE
Client borrows R10,000 for 90 days.
Loan Amount | Repayment Period | Monthly Interest | Total Cost of Loan | Initiation Fee | Monthly Fee | APR |
|---|---|---|---|---|---|---|
R10 000 | 3 months | R500.00 | R2 914.50 | R1 207.50 | R569.00 | 60% |
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.