Rolex watches were originally something that the typical working person could afford by working hard, and many people considered them as the entrance point to mechanical watches because of their exceptional performance and practicality.
A very popular sport series Rolex watch can now cost hundreds of thousands of dollars or more, and it is no longer considered an entry-level model. Rolex watch prices have been steadily climbing for a long time. In the next part, we will examine the pricing trend and its prospective trajectory.
The price hike of Rolex is unstoppable
In recent years, the price of Rolex watches has risen significantly.
As an example, consider the Ref.116710BLNRGMT Master II blue and black dual-color ring model. GMT Master introduced a New Era models lead by Ref.126710BLRO at the Basel International Watch and Jewelry Fair this year, and became the center of attention.
At the same time, older models are gaining popularity again. For example, Ref.116710BLNR’s average price at parallel import retailers in fall 2016 was 900,000 yen; however, due to low supply, the price increased to 1,200,000 yen a year later.
In 2018, the price increase following the Basel International Watch and Jewelry Fair was much greater, nearing 1,400,000 yen. The cost of a new Ref. 116710BLNR has risen by more than 55% in the last two years.
The price of the Submariner Date Ref.116610LN has climbed by roughly 40% in the previous two years, while the price of the Daytona Ref.116500LN has increased by 25%, maintaining its upward trend since its inception.
Rolex watches are also attractive as investments
There was a saying in the 1990s that “about half of all the Rolex sport series were exported to Japan,” but that is no longer the case; demand is increasing internationally, including emerging markets such as China and Southeast Asia countries, and the long-term supply shortage will also continue to push the price higher.
Rolex has indeed become the largest company in Switzerland, but they are still unable to meet the great demand; as a result, it continues to gain attention, retaining its high popularity.
There are very few products in the world whose prices can continually rise, and as a result, many people now trade Rolex watches as an investment tool on a regular basis.
Rolex’s models that are less likely to depreciate easily
Looking back at the pattern thus far, despite changes in models, production time, and stylistic aspects, the models that have continued to gain in value are often sport series.
From the first manual-winding model Ref.6239 to Ref.6265, to the present auto-winding model Ref.16520Ref.116520. Daytona has the overpowering presence and appeal of a king among monarchs. If Daytona becomes unpopular, Rolex’s value will plummet.
Collectors prize the Ref.6200, Ref.6538, Ref.5510, military model, and Comex, Single Red as antiques that can no longer be purchased with money. It has enduring fame as the birthplace of the Rolex sport series.
In the sport series, this model obtains popularity in the late-2000s, mostly in Italy; its popularity gradually catches up with other series, and it now belongs to the top collection. It was designed for international pilots and is considered the most classic in the sport series. The initial model, Ref.6542, is now a collector’s dream.
The Explorer, with its basic form, is the most recognizable, while the Explorer II has a 24-hour pointer. This series has been popular from the early days of the Rolex obsession. Among the several versions, the initial Explorer II Ref.1655 had its own particular personality and was well-liked.
The historical treasures described above differ significantly from other stainless-steel variants.
Compare with other models than the sport series
The Rolex Datejust is a classic series that is built with the hearts and souls of the watchmakers; it has lately become the focus of collectors’ attention due to the skyrocketing price of the 1950s vintage edition. However, when compared to the dramatic price changes of other similar generation sport series, it still appears too ordinary.
Below are some actual examples.
If you purchased an original 1970 Datejust Ref.1601 about 2008, as long as the traces of usage are not visible, you will only receive a little reduction from the current trade price.
That is, not only can you wear it for a long time, but you can also sell it for a price close to what you paid for it. Nobody can disagree that it is a very affordable buy.
So, what will happen in the case of sports series?
If you purchased a 1970 Submariner Ref.5513 in roughly 2008, and it is still in excellent condition, it can easily reach or even exceed the purchase price.
In other words, while the price of Ref.1601 has recovered following its fall, the price shift of Ref.5513 is more dramatic and noticeable. If the state of the watch deteriorates due to daily usage, the price will be decreased proportionately; nevertheless, because Rolex’s watch is exceptionally robust, it should be able to remain in excellent condition as long as it is handled with care.
Example of Rolex’s watch price drop
When purchasing a Rolex watch, everyone wonders, “Will it really not depreciate in value?” We shall provide some historical examples of depreciation.
First, the Bubble Back and Prince, which were manufactured before 1940, were highly regarded throughout the 1980s and 1990s antique watch obsession. However, most of the timepieces are in terrible condition due to their age, and the manufacturer no longer produces new replacement components, making overhauling much more difficult. Watches that are still in usable shape are steadily disappearing from the market; just a few watch enthusiasts are still interested in them, but the market price is not as high as it once was. They are the only second-hand and antique objects that were considerably depreciated in value as a result of the Lehman Brothers disaster in 2008.
On the other hand, when Yacht-Master Rolesium 16622 debuted in 1990, the price skyrocketed. Despite the fact that the price has retraced, it appears to have plunged uncontrolled recently.
When will Rolex depreciate in value?
As previously noted, it is not uncommon for Rolex to lose value. But they all have one thing in common: they are only transitory. Even if the value deteriorates significantly owing to a specific issue, it will ultimately return to a steady price, or slightly above its previous price in some cases.
The circumstance when there are changes in the fundamental worth of Rolex is nearly non-existent, the price decline is usually due to external forces, especially in recent years. Though there are instances where the price retraces after hitting an extremely high level 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 continue to fall in the future? Consider the following scenario.
Affected by economy and foreign exchange rate
If the world economy crashes on the same magnitude as the Lehman Brothers catastrophe, the price of Rolex may fall once more. The recent Covid-19 outbreak exacerbated the problem. Rolex’s price begins to plummet in the second part of January 2020 owing to a sharp reduction in internal demand. By mid-February, the fall in the number of flights had resulted in a decline in the volume of Rolex on the market. With demand being unchanged, the price climbed owing to a decrease in supply.
This demonstrates that a terrible economy does not always result in a drop in Rolex prices. The important factors are the supply-demand balance and the currency rate. Although it is unthinkable, a sudden rise in Rolex supply or an increase in the currency rate might result in a large depreciation of Rolex.
What if Rolex’s branding strategy fails?
Proper functioning may increase the value of a brand. Although the functionality and design of a Rolex watch are unquestionable, the price outweighs these considerations. The reason for this is due to Rolex’s effective branding campaign. What happens if their present branding approach fails? If they made a decision that enraged watch aficionados (for example, a clearance sale etc.), then it is possible for the price of Rolex watch to decrease significantly.
However, if we look at Rolex’s historical operations and branding strategy, it is safe to assume that there aren’t many organizations out there that are as familiar with their own worth as Rolex. The proof is that the word Rolex is now synonymous with branded watches. While preserving their overwhelming popularity, they manage the volume of Rolex on the market via manufacture, therefore keeping their flawless premium impression. In other words, no one can envision the collapse of Rolex’s branding approach.
Rolex’s popularity is unshakable
Rolex products, from ancient to current models, are frequently priced in the millions of dollars at international auction. Many of these goods were initially valued in the $100,000 range; how long will this incredible price hike last?
Also, being the pinnacle of human understanding, does the mechanical watch have the monetary worth to symbolize our history? Whatever the outcome, Rolex’s popularity remains unrivaled at the moment.