Tag Archives: vintage watches

The Growing Appeal of Vintage Watches

Perhaps the fastest-growing segment of the watch collecting arena is the growth in the sales of vintage watches.  Sales of certain rarities in the world of horology have brought record prices in recent auctions, and this shows no sign of letting up anytime soon.

What’s the appeal of buying a vintage watch?  Wouldn’t most buyers be happier buying a new one?

In the case of buying a regular wristwatch, buying a new one makes sense, particularly if you’re interested in something that keeps accurate time.  Watch technology is constantly improving, and watches today are more accurate than watches of a generation ago.

But new watches in the high end of watch collecting – the likes of Rolex, Patek Philippe, Chopard, A Lange & Sohne, Richard Mille, and so on, are not only better than they used to be, but they’re also far more expensive.

This is particularly true in China, which has, in recent years, become one of the world’s largest market for luxury watches.  The Chinese government recently imposed a significant tariff on imported luxury watches in an attempt to encourage Chinese buyers to purchase locally manufactured goods.  This has done some of that, but it has also inspired many buyers to look for second hand vintage watches, which can sell for less than a new one.

For the most part, supply and demand comes into play when it comes to vintage watches.  There are only so many of any luxury watch available for sale, but older ones are going to be more rare, as some timepieces do disappear over time.  If there were 1000 of a particular model made in 1960, there are likely to be considerably fewer of them available today, and even fewer still that are in pristine, collector-quality condition.

Certain models, such as the Rolex “Paul Newman” Daytona, were once commodities that no one cared about.  Today, any version of that watch sells for a price that’s well into six figures, and every one wants one.

vintage patek philippeOf course, there’s no way to know which watches are available today that people will want to morrow, but there are several brands, such as the ones mentioned above, that are always in demand and are always relatively limited in production.  Collectors are grabbing those and the prices are rising in response to the increased demand.

This has been reflected in the prices seen at auctions, particularly those by the most reputable of the auction houses.  One of the problems with buying vintage watches is provenance.  It’s not just a matter of making sure that the watch you’re buying is genuine, which is a common problem with Rolex, but ti’s also a matter of making sure that the watch you’re buying is completely original.

Many watches have been modified over the years, and a lot of Rolex watches have been modified, for example, to look like a Paul Newman Daytona when they really started out as something else.  When you’re buying from a reputable source, you’ll have a better chance of knowing that you’re getting the real thing when you pay. Of course, you’ll also likely pay more, as you’re paying for the expertise of the auction company’s experts.

All of this can still turn out to be a good investment, as prices on older, interesting watches from famous makers are rising daily.

Is the Watch Market Due for a Correction?

The rare watch market, particularly as it concerns mechanical wristwatches, is an odd duck as collectibles go.  Most people don’t even wear wristwatches anymore, as they have their smartphones to tell them the time.

Despite this, and the decades-old trend towards quartz movements in the timepiece industry, the market for rare and unusual timepieces seems to be insatiable.

Just a few years ago, during the Great Recession, watch manufacturers were concerned about going out of business due to the lack of demand worldwide.  In less than a decade, this has changed dramatically, and makers such as Rolex, Patek Philippe, Breitling and others are suddenly churning out tremendous numbers of watches.

Many of these are limited editions, with unusual features – moonphases, a tourbillon, lots of gold, lots of diamonds, and often with production numbers that are well under a hundred pieces.

Some of these also have prices that are well north of $50,000.  A few even have prices that go into seven figures, as seen below:

One would think that the market for such things would be saturated by now.  Everyone has but two wrists.  You can only store so many watches in your case.  The limit for the number of $10,000+ timepieces that someone might want to own would seem to be finite.

Yet production continues, and people are snapping up the limited edition items as fast as they can come off of the assembly line.  Much of this is due to the explosive growth of the economy in China, and people there are quick to want to show off their success.  One way to do that is to show people that you have “Western” symbols of success, and expensive automobiles and luxury watches are a great way to do that.

Rolex Cellini

Because of this, a surprising number of these expensive watches have found their way to Asia, and that does leave some people in the industry concerned.  If all of those watches are over there, what happens if there’s an economic collapse?

Another issue is that there is a seeming glut of vintage pieces for sale right now.  You might flinch at the price that you’ll have to pay for a brand-new Rolex, for instance, but you can buy one from the 1970s or 1980s that’s in great shape and which still has the Rolex pedigree for a lot less money than you’d pay for a new one.

Savvy collectors know this, but the newly wealthy in Asia don’t care…today.  That may change if the market gets a little shaky.

There are a few other factors that suggest that a market correction may soon be in order:

  • Anti-corruption laws in China now make it difficult to bribe public officials, and high-end watches used to be the currency of choice for that.
  • As sales have increased, so have prices, and a lot of would-be buyers are starting to balk at prices that have doubled or tripled in recent years.

It’s hard to say if the market is going to collapse, or fade, or just quietly slow down.  But as anyone in manufacturing can tell you, double-digit sales booms don’t last forever.

Sooner or later, and possibly sooner, there’s going to be a downturn in the high end watch market.  The biggest driver of this, of course, will be the overall economy, and if there’s a global slowdown in the stock markets, then the luxury goods markets will soon follow.

Now might be a good time to start investing in vintage timepieces, rather than limited edition new ones.