Is it true that Rolex does not depreciate in value? | JEWEL CAFÉ Malaysia

Date published: July 7, 2022

Is it true that Rolex does not depreciate in value? | JEWEL CAFÉ Malaysia


women

What are our discussion about today?


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It's about branded watch! Luxury watches are lifestyle accessories, investment potential and are built to last.


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It's interesting, how do i know more about luxury watches?


women

You will know more about luxury watches by reading article below.


In the past, Rolex watches were once something that the average working person could buy by working hard, and because of their excellent performance and practicality, many people saw them as the entry point to mechanical watches.

Nowadays, a highly popular sport series Rolex watch can cost hundreds of thousands or even above, it can no longer be called as an entry-level model. Rolex watches’ price have only been rising for a long time. We will take a look at the trend and future direction of the price in the following section.

The price hike of Rolex is unstoppable

The price increase in Rolex watches has become significant in recent years.

Using Ref.116710BLNR、GMT Master II blue and black dual-color ring model as example. In the Basel International Watch and Jewelry Fair this year, GMT Master announced a New Era models led by Ref.126710BLRO, and become the center of attention.

At the same time, the old models also receiving a lot of attention again. For example, Ref.116710BLNR, it’s average price in parallel import stores was 900,000 yen in autumn of 2016, due to the insufficient supply, the price reaches 1,200,000 yen a year later.

The price hike after the Basel International Watch and Jewelry Fair was even more significant, approaching 1,400,000 yen in 2018. During these 2 years, the price of a new Ref. 116710BLNR has increased by more than 55%.

The Submariner Date Ref.116610LN have an increase in price of around 40% for the last 2 years, while Daytona Ref.116500LN has increased by 25%, continuing its uptrend since its launch.

Rolex watches are also attractive as investments

In 1990s, there was a saying that “out of all the Rolex sport series, about half were exported to Japan”, but it is different now, the demand starts to increase internationally, including emerging market such as China and Southeast Asia countries, and the long-term shortage of supply will also continue to push the price higher.

Rolex has in fact become the largest corporate in Switzerland, yet they still unable to satisfy the large demand, it also continues to receive attention due to this reason, maintaining its high popularity. 

There are very few items in this world that can have their price consistently increase, and with the other implications, there are a lot of people who repeatedly trade Rolex watches as investment instrument nowadays.

Rolex’s models that are less likely to depreciate easily

Looking back to the trend so far, even though there have been changes in models, manufacturing time and style details, but the models that continued to rise in value are generally sport series.

Daytona

From the initial manual-winding model Ref.6239 to Ref.6265, auto-winding model Ref.16520、Ref.116520, to the current Ref.116500. Daytona have an overwhelming presence and popularity, like the king of the kings. If there comes a day where Daytona is no longer loved, it will be the time when Rolex lose its value.

SubmarinerSea Dweller

Ref.6200, Ref.6538, Ref.5510, military model and Comex, Single Red are all coveted antiques by collectors, they are now classics that can’t be bought even with money. As the origin of the Rolex sport series, it has an unshakable popularity.

GMT Master

In the sport series, this model gains its popularity in late-2000s mainly in Italy, its popularity also gradually catches up with other series, belongs to the collection of the later on the top. Developed for the international pilots, it is regarded as the most classic one in the sport series. The first model Ref.6542 is now a dream to all collectors.

Explorer

The simple-designed Explorer is the most recognizable, while the Explorer II is equipped with a 24-hour pointer. This series has been popular since the beginning of the Rolex trend. Among the numerous models, the first Explorer II Ref.1655 have its own distinctive character and continued to be loved.

Above mentioned are the historical collectibles with distinct differences from other stainless-steel models

Compare with other models than the sport series

Rolex Datejust is a classic series that is created with hearts and souls of the watchmakers, it become the center of attention of the collectors recently due to the soaring price of the 1950s vintage model. But comparing to the volatile price change of other same generation sport series, it still seems too ordinary.

Below are some actual examples.

If you bought an original 1970 Datejust Ref.1601 in around 2008, provided the traces of use are not obvious, there will only be slight discount from the latest trading price.

Which mean, not only you can wear it for long term, you can also get a selling price near to your buying price when you sell it. Nobody can deny that it is a very cost-effective purchase.

So, in the case of sport series, what will be the situation?

If you bought a 1970 Submariner Ref.5513 in around 2008, which also have unique originality, provided that it is still in great condition, it can easily reach or even surpass the buying price.

In other words, even though the price of Ref.1601 has rebounded after its drop, but the price change of Ref.5513 is more drastic and is more eye-catching. If the condition of the watch deteriorates due to daily use, the price will be reduced accordingly, but due to the fact that Rolex’s watch is extremely durable, as long as it is taken with great care, it should be able to remain at its best condition.

Example of Rolex’s watch price drop


When investing in Rolex’s watch, the question in everyone’s mind is “will it really not depreciate in value?”. We will state a few examples of devaluation in the past.

First, the Bubble Back and Prince made before 1940, it was highly touted during the vintage watch trend in 1980 – 1990. But due to its age, most of the watches are in a poor condition, topping up with the fact that the manufacturer no longer produce new replacement parts, which make the overhauling even more difficult. Watches that are still in usable condition gradually disappear from the market, only a handful of watch enthusiast remain passion in them, but the market price is not as high as before. Among the second-hand and vintage items, they are the only one that got affected by Lehman Brothers incident in 2008 and depreciate significantly in value.

On the other hand, when Yacht-Master Rolesium 16622 made its debut in 1990, also had a drastic price soar. Even though the price retraced, but it seems to dropped uncontrollably recently.

When will Rolex depreciate in value?

As stated above, the case where Rolex depreciate in value is not rare. But they have one thing in common, which is it is temporary. Even if the value largely deteriorates due to certain factor, it will still go back to a stable price eventually, or slightly above its original price in some case.

Especially in recent years, the situation where there are changes in the intrinsic value of Rolex is almost non-existent, the price drop is mostly due to external factors. Though there are cases where the price retraces after reaching abnormally new high, but those are considered as “returning to fair price”, it can’t be deemed as value depreciation of Rolex.

The timing of Rolex’s price drop in the future

So, will the Rolex’s price drop again in the future? Let’s visualize such situation.

Affected by economy and foreign exchange rate

Should a global economy crash same scale as the Lehman Brother’s incident happens, the price of Rolex might drop again. The Covid-19 outbreak recently further complicated the situation. At the second half of January in 2020, Rolex’s price start to fall due to the sudden decrease in internal demand. By mid-February, the decrease in number of flights lead to the reduction of volume of Rolex in the market. With the demand remain unchanged, the price rose again due to the reduction in supply.

This shows that it is not necessarily the case that a bad economy will cause the price of Rolex to fall. The balance in supply and demand as well as the exchange rate are the keys. Although it is unimaginable, but if there is a sudden increase in Rolex’s supply, or increase in the currency rate, Rolex could experience a significant devaluation.

What if Rolex’s branding strategy fails?

The value of brand can be enhanced through proper operation. Although the performance and design of Rolex watch is undoubtable, but its price still outweigh these factors. The reason of it is due to the successful branding strategy of Rolex’s company. So, what if their current branding strategy fail? If they took a move that caused the resentment of watch enthusiasts (for example, a clearance sale etc.), then it is possible for the price of Rolex watch to decrease significantly.

But, if we take a look at Rolex’s past operation and branding strategy, it is safe to say that there aren’t many companies out there that are as comparable to Rolex in familiarity to their own value. The prove is that the name of Rolex is now the representation of branded watch. While maintaining their overwhelming popularity, they control the volume of Rolex in market through production, and continuously asserting their perfect premium impression. In other words, everyone can hardly imagine the failure of branding strategy of Rolex company.

Rolex’s popularity is unshakable

The product of Rolex can often be seen pricing at around a few million in international auction, including antique to modern model. Many of these items were originally priced within one hundred thousand, how long will this unbelievable price increase last?

Also, as the culmination of human knowledge, does mechanical watch really have the value to represent our history? Whatever the result is, the popularity of Rolex currently is still unchallengeable.


women

I find out more interesting facts in here.


women

Yes that's true, you can also get more information about other luxury item facts in here


women

Oh okay! Thank you so much.


women

You're welcome


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