How to invest in watches in 2024?

What you need to know before investing in watches

When it comes to luxury watches, Above all, we are talking about Switzerland. The birthplace of watchmaking, the Helvetians reign unconditionally over this 200-year-old industry. Large family houses like Patek Philippe are its jewels. Upset by the emergence of quartz (and low-cost watches) in the 70s, they were able to bounce back and now offer increasingly expensive and rare models. This market is particularly popular with wealthy clients of the wealth management.

Investing in watches is a huge market that is divided into 2 parts: the primary market (nine) and secondary. (second hand)

It's an overheated market: the fall in stock market indices and the war in Ukraine brought the market to a standstill in 2022. The price of top watches has fallen by 25% 📉

Necessary, this correction now makes it possible to position ourselves on promising models at reasonable prices.

Investing in new watches?

The primary market ($50 billion per year) is the sale of new watches by manufacturers or retailers (such as Bucherer or Tiffany & Co). In fact, Tiffany was recently bought by LVMH. Since we are talking about investment, we will only focus on the most requested brands: Rolex, Audemars Piguet and Patek Philippe. If you need to remember only three model names, these will be these: Rolex Daytona, Patek Philippe Nautilus or Aquanaut, Audemars Piguet Royal Oak. Other slightly less prestigious models may also be interesting.

The specificity of the primary market is that the most requested models from these 3 watchmakers are almost impossible to find. If you go to the Patek Philippe store on Place Vendôme in Paris and ask for a Nautilus, we'll tell you that The waiting list is closed. If you go to Audemars Piguet and ask for a Royal Oak 15202, you will be informed that you will have to Wait at least 3 years before being entitled to pay €28,000 for this model.

The reason? Patek Philippe and Audemars Piguet make very few models, and (almost) everything is handmade. Since its inception, Patek Philippe has made less than 1 million watches, the equivalent of what Rolex makes each year. The calibers, the heart of the reactor, are in-house movements that required years of R&D, the materials are noble (gold, silver, platinum) and the complications can be extreme (e.g. tourbillons).

Buying a luxury watch is joining a club. Brands favor buyers with a history. It is this organized shortage by the manufacturers who explain that the price of Rolex, Audemars Piguet and Patek Philippe watches is constantly rising. Investing in the stock market may be much less profitable than investing in watches...
The more you spend, the easier it will be for you to access rare coins on the primary market. Know that a very Large customer at AP or Patek Philippe spends an average of €500,000 per year.

Attention: the majority of brands and models have little or no demand on the secondary market. These models are therefore subject to a strong discount upon purchase, there is no interest in investing in them. Buying a watch to invest is still the exception, not the rule.

Investing in vintage watches

The secondary market ($24B in 2022) is the sale of vintage watches. Vintage is anything that is not new, regardless of whether the watch is 1 day old or 100 years old. This is the jungle. Since the primary market tap is off for ordinary people, High school prices are exploding.

For example, your AP 15202 When you buy €35,400, it's worth 2.5x more on the secondary market... This model has not been produced since 2022, so it will become more and more rare (and expensive)

A Patek Philippe Nautilus 5711 purchased new will instantly be worth 2.5 times its original price on the secondary market. Is it a real safe haven or a Precautionary savings.
Brands make The hunt for customers who “freak out” (sell) new watches : if you are caught, you will be “blacklisted” at the watchmaker and will no longer have access to the primary market. Since each watch has its unique serial number and its history is traceable, brands can easily track down sellers.
The price of used watches has exploded in the last 10 years and prices have soared. Example with a Patek Philippe 3700 from the 70s: it is now worth more than €200,000 against “barely” €9,300 in stores at the time. (i.e. a performance of +2100%)... This purchase is much more profitable thanBuy shares, but he is not not within reach of the first comer.

Namely:
You can track watches on Finary with more than 100,000 references and can get an automatic estimate updated in real time.

What watch should you invest in?

As with all collectibles, It is the brand, the rarity of models and the condition that make the price of a watch. If the watch comes with the original papers (with the serial number on it) and the original box, we talk about”Full Set”. It's the holy grail, and it's what collectors are looking for. If you are wondering which watch to invest in in 2024, you will be delighted to find out our selection of the best models, classified by budget.

Investing in watches for less than €5,000

Rolex Datejust: The Rolex Datejust Oyster is Rolex's entry-level model. Created in the mid-1940s, the popularity of this model has continued to increase. Its rating has increased by more than 350% in the last 10 years. Produced in large quantities, it represents more than 10% of Rolex watches sold at auction. Buying a Rolex Datejust allows you to start making watches at an affordable price. Models in excellent condition can be found from €5,000 on the internet, which allows you to invest in a Rolex without breaking the bank.

Universal Polerouter: The Geneva-based brand Universal is a name that is little known to the general public. However, it is of major importance in the history of watchmaking and remains very popular with lovers of luxury watches. Designed by the legendary Gerald Genta (the “father” of the Royal Oak and Nautilus), the Polerouter was carried by the English Special Forces (SAS) during the first flights on the “polar” route (flying over the Arctic Circle). Sold for around €2,000, this model is the perfect example of a watch to buy to invest.

Omega Speedmaster: Launched in 1957, the Omega Speedmaster became an iconic model after being approved by NASA. Imagine that astronaut Buzz Aldrin was wearing it when he stepped on the moon in 1969, a historic moment. This exceptional watch cannot be found today because it was stolen from the Smithsonian, the Air and Space Museum located in Washington, in the United States. Its price has tripled in the last 10 years, making a solid and profitable financial investment. The Omega Speedmaster is the archetypal watch that is constantly increasing in value. It increases in value regularly, and is worth around €5,000.

Tag Heuer Carrera: The name of this Tag Heuer reflects its image: it is a watch made for motor racing and speed. Launched in the 1960s, it was able to seduce luxury watch enthusiasts by the precision of its chronograph as well as its elegance on the wrist. In terms of price, Tag Heuer Carreras start at €1500 and can go up to over €60,000 for the rarest models. It belongs to the category of watches that do not lose value, quite the opposite. The increase in its value compared to antique watches is constant, which makes it an interesting watch for an investment.

Investing in watches for less than €20,000

Rolex GMT Master 2 “Batman”: Descendant of the legendary Rolex GMT Master, the GMT II was relaunched in 2005. Its case measures 40mm in diameter, making it a larger model than its illustrious predecessor. It comes in 2 versions: black and blue (“Batman”) and blue and red (“Pepsi”). The nicknames were given by collectors and are not official names. Sold for €10,100 in stores, it is worth around €17,000 on the secondary market. If you are wondering which Rolex to buy, this model is an excellent option, (-25% since 2022), this drop can be an interesting entry price for this timeless model.

Investing in watches for more than €20,000

Royal Oak 14790: This Audemars Piguet Royal Oak dates from the 90s. Equipped with the iconic octagonal bezel, it has everything of a Royal Oak. Popular with Italian buyers who appreciate small watches (36mm), it has truly found its audience in 2019. The most sought-after variation is blue tapestry, as is often the case with Audemars Piguet. Its price now reaches €35,000, compared to only €12,500 in 2019. If you are looking for a well-made Royal Oak 14790, you will certainly find what you are looking for in the Audemars Piguet Chrono 24 category.

Aquanaut 5060: The Patek Philippe Aquanaut 5060 has a fascinating history. Launched in 1997, it would have been made to order for officers from a Gulf country, which would explain its pomegranate-shaped tapestry. The composite strap makes it a sporty and easy to wear watch. Produced in only 1000 copies, it has become highly sought after in recent years. Its price currently hovers around €26,000, an excellent choice to invest in a watch if you want to diversify and Place 500,000 euros.

Nautilus 3800: Created by Gerald Genta, the Patek Philippe Nautilus 3800 follows its big sister, the legendary 3700. They share the same characteristics: porthole-shaped bezel, lugs, steel bracelet... The 2 major differences lie in the diameter (37.5mm for the 3800) and the in-house 335 SC caliber (compared to a Jaeger Lecoultre caliber for the 3700). Another notable difference is the price. While a 3700/1 in perfect condition can cost more than €150,000, the 3800 can cost around €35,000. It is a watch to invest, as long as you have a big budget.

Rolex Daytona: This mythical model launched in 1963 was popularized by American actor Paul Newman who loved to wear it in his movies. Paul Newman was so associated with the Rolex Daytona that collectors ended up naming the version's rarest dial after him. The Rolex Daytona that belonged to Mr. Newman was sold at auction for over $17 million in 2017. Since investing in a Rolex is seen as a safe financial investment, Daytona's price trends have been stratospheric. The ceramic model with a white background, available at around €25,000, is a promising investment.

Investing in watches on the internet?

Before investing in watches, You have to find the right part. The bulk of the market is traded via retailers or on websites. Unlike the primary market, the secondary market allows you to invest in watches, provided you are ready to pay the price.

Even if there is no such thing as a watch exchange, there are many options available to you and the choice is anything but easy. We review the main options for getting your hands on a watch that is increasing in value. Some private banks can help their customers get these rare models, but the entrance fee is very expensive.

● Chrono24: The reference site for tracking watch prices and finding gems. The site, considered to be the center of antique watches, is used by many professional dealers. Its strong point is security: when you pay via Chrono24, you automatically benefit from buyer protection.

Good to know: select “Watch with original case and original papers” in the Chrono24 filters in order to see only “full set” watches.

• Chronext: This platform makes it possible to make an investment in watches in complete safety. Each watch is checked by Chronext watchmakers and is guaranteed to be authentic. This verification comes at a price and buying via Chronext will often be more expensive than via Chrono24.
• CDA by Chronomania: The classified ads section (or “business corner”) of this forum for enthusiasts lists numerous pre-collector watches, in particular Cartier or Breguets. However, there were relatively few offers and despite the vigilance of the moderators, the risk of fraud remains very real.
• Leboncoin: We don't necessarily associate luxury watches with Leboncoin. However, there are regularly gems that are sold on the site. Since the risk of fraud is maximum, you need to be very experienced to be able to identify fakes.
• Ricardo.ch: Leboncoin's Swiss cousin is very well known for its watch section. It benefits from the fact that investing in watches is part of the culture in Switzerland. You'll find lots of interesting watches there, but the risk of fraud is still high.

Exchange with other investors who are passionate about watches on The Finary community and discover new investment opportunities!

Investing in watches differently?

If you are not comfortable buying a watch on the internet, there are other alternatives that may suit you in order to find watches that are increasing in value.

• Aron'son: It seems logical to go see a specialist like Aron'son in Paris to invest in watchmaking. It is reassuring to talk to a professional who is established on the street. The main disadvantage of a seller like Aron'son is that the supply will be limited, which is problematic if you are looking for a model that gains very accurate value. In addition, Aron'son will apply a commission on the sale, so the prices are generally higher than on the Internet
• Auction: Major auction houses like Christies, Phillips, Drouot or Antiquorum have long had a monopoly on which watches to invest in. The arrival of the Internet has changed the situation. Today, the prices of “normal” models sold at auction are much too high because 25% fees must be added to the “hammer” price. In truth, auctions are mostly reserved for exceptional watches and very large collectors. In 2019, the Patek Philippe Grandmaster Chime broke the world record by winning 31 million CHF at the Christies “Only Watch” sale in Geneva, a unique moment.

Investing in watches with full knowledge of the facts

There is a great asymmetry of information between professional sellers and buyers, who are often novice. It is therefore essential to learn about the watch, check every detail and go through a merchant with a liability before buying anything.

Copies abound and it's easy to buy a watch with fake papers or a modified dial, which will greatly affect resale value. The release of a ETF investing in these assets would democratize its access!

Investing in watches: what about taxation?

VAT at the time of purchase

All collector's watches, purchased new or used, are subject to 20% VAT. Investing in a Rolex purchased abroad can be interesting since you will be able to recover VAT.

Attention: You must “retax” the watch when you arrive in France and pay 20% VAT. The purchase is therefore only interesting if the VAT abroad is higher than that applied in France.

Capital gains taxation

Capital gains made on the watches to be invested are taxable. The only exception is for watches whose value is less than €5,000. For others, you have the choice between 2 types of taxation:

• Common law taxation: the overall rate on capital gain is 36.2% and consists of 19% (income tax) and 17.2% (CSG CRDS).
• Flat rate taxation: This rate varies according to the quality of the watch. It amounts to 6.5% (including 0.5% of CSG CRDS) for watches considered to be works of art and 10.5% (including 0.5% CSG CRDS) for all watches considered to be precious metals (platinum, gold, silver, bronze).

It's up to you to see which rate is the most favorable. There are several ways to reduce capital gain, and therefore your tax bill:

• Include the costs of acquiring, restoring, or reconditioning the watch. Maintenance costs cannot be included.
• If you keep your watch for 22 years and opt for ordinary taxation, you will be exempt from income tax. You will also be exempt from social security contributions (17.2%) if you keep the watch for more than 30 years. In order to benefit from this very favorable regime, it is obviously necessary to be able to prove the date of acquisition, which must indicate the value of the watch on the day of purchase. An insurance certificate may also do the trick.

The recipe for a successful investment in watches:

• A strong and desirable brand (Rolex, Audemars Piguet, Patek Philippe).
• Watch produced in a few copies, or even unique.
• An interesting story, ideally with a star as the former owner (ex: Paul Newman and his Daytona sold for $17.8M)
• Purchase of a full set (watch with its papers and its original box)

FAQ

How to invest in watches? There are many options for investing in watches: buying from a watchmaker or retailer, on the internet via sites like Chrono24 or Chronext or even at auctions. The most important thing is to find a trustworthy seller and to make sure that the watch offered is as described.

What watch should you invest in in 2024? The watch market has exploded in recent years. This year, the most popular models are the Rolex Submariner, the Rolex Oyster with colored dials, the Royal Oak by Audemars Piguet or the Nautilus 5711 by Patek Philippe.

Which watches are increasing in value? The flagship models of major watch companies are sure values and increase in value almost certainly over the long term: Submariner, Datejust, Daydate or Oyster at Rolex. Nautilus and Aquanaut at Patek Philippe, Royal Oak and Royal Oak Offshore at Audemars Piguet.

In which Rolex to invest in in 2024? Rolex is a sure bet for investment. Models like the Datejust, the Oyster Perpetual or the Submarine cost less than 10,000 new and have always increased in value over the long term. For larger budgets, the Daytona can be a great investment.