In 2020, at the height of COVID-19, the entire world had suffered through a major economic shock, one that has not been witnessed in the last century. In all the chaos of recovering from such drastic economic impact, the luxury watch industry was still thriving. What was slowly gaining momentum, had rapidly skyrocketed in terms of popularity, setting a new trend in the world of investments.
Luxury watches have always remained in the limelight of glam and glitz. Collectors worldwide, be it the UAE or the United States, have actively participated in the process of collecting rare and valuable watches. However, what was more of a passion project has evolved into a lucrative business.
Watch enthusiasts who have invested in premium watches, have turned them over for a profit, encouraging more people to adopt this practice. Gone are the days, where real estate and gold were the only things to invest in. Today luxury products like vintage watches gain substantial value over a period of time.
The factors that contribute to the constant growth in value are exclusivity and quality. Most high-end watch brands produce their watches in limited numbers and are made using premium quality materials. The economic phenomenon of high demand and low supply, automatically results in the increase in value of products circulating in the market.
For instance, luxury Swiss brand Rolex produces a limited number of watches every year. In fact over the last two years, the brand has suffered supply delays, creating a shortage of watches in the retail market. Despite that, the demand for Rolex watches has not slowed down. Watch collectors seeking to invest in these timepieces have reached the pre-owned market, resulting in a positive trend in this particular sector.
Over the last 2 years, the United Arab Emirates has emerged as a hub for watch collectors from all around the world. Considering Rolex as an example, a Rolex watch price in Dubai in the pre-owned segment has made the region the best place to buy Rolex watches. Thus, more and more investors are arriving in the UAE to get their hands on luxury watches.
Why have luxury watches become so popular?
Luxury watches produced by premium brands have become popular due to their build quality and functionality. Subsequently, the aspect of investment has also led to the prominence of these watches.
What is rare and of high quality is typically priced high. Additionally, when a watch is sold in limited numbers or is discontinued, the idea that you can’t acquire it from the retail market drives up its demand.
Thus, the price of watches that have already been sold goes up. This encourages owners to sell their watches at higher prices than the purchase price, creating an opportunity for business.
Perhaps, the practice of buying rare watches and turning them around for a profit is what has created such hype in the luxury watch industry. Both the retail and pre-owned markets are growing simultaneously. However, in places like the UAE, the pre-owned market is gaining rapid development.
As per reports, in 2022 the global luxury watch market was valued at $28.43 billion. At the rate at which the industry is currently gaining traction, experts predict that the growth of this industry will reach a staggering number of $33 billion by the year 2026.
Taking the UAE luxury watch market into consideration, the revenue generated through this sector amounted to $1.5 billion in the year 2023. With the growing demand for high-end timepieces and the rapid expansion of the UAE watch market, the annual growth rate calculated between 2023 and 2027 is 2.57% CAGR.
Of all the watchmakers present today, Rolex is a brand that has maintained the longest streak of success. The majority of watch models produced by this Swiss watchmaker have captured the luxury watch market and led the way for other premium brands. Some of the most popular Rolex watches are the GMT Master II, Submariner and Cosmograph Daytona.
These models of Rolex have only gone up in value, and are selling for profitable prices in the pre-owned market. Experts have suggested new investors to consider Rolex as a great watch to invest in. Considering the current situation of Rolex retail, it is advisable to pick up one of their watches from the secondary market.
The prices of Rolex watches in the secondary market are incredibly attractive. In fact, you don’t have to wait around for years before you get your hands on a Rolex watch. Some of the biggest pre-owned watch dealers are present in Dubai and are offering an extensive collection of watches.
What’s even more impressive about the pre-owned market is the vast variety of watches available. You not only have the chance to get your hands on the latest watches, but also the ability to invest in vintage timepieces. Moreover, buying discontinued watches like the Rolex Hulk for instance is only possible from the pre-owned market.
Apart from Rolex, other brands like Patek Philippe, Richard Mille and Audemars Piguet, also sell for very high prices. If you are a first-time investor, it’s always advisable to do your research, understand your budget and purchase a watch accordingly. Nevertheless, in a few years time, depending on the market conditions, you can expect to receive a great return on investment.
Should you invest in luxury watches?
Considering the potential of this asset, we definitely think you should invest in luxury watches. Top watch collectors have shared their experiences of trading high-end timepieces for exceptionally high prices. If you are looking to expand your portfolio of investments from real estate and other assets, consider luxury watches as a great option.
Well, now that you have decided to invest in a luxury watch, you must be aware of some of the top-performing brands. Luxury watchmakers like Rolex, Audemars Piguet, Patek Philippe, Cartier and Jacob & Co. are known to produce the most valuable watches. These timepieces have shown stability in market value and performed exceptionally well in the pre-market.
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