The Honest Answer: It Depends

Every few months, a headline declares that a certain Rolex returned more than the S&P 500 over the past decade. And every few months, someone else points out that the average luxury watch depreciates the moment you walk out of the boutique. Both statements are true. The reality of watches as investments is far more nuanced than either camp suggests.

At Watches Established, we deal in pre-owned luxury watches every day. We see which pieces appreciate, which hold steady, and which quietly lose value year after year. Here is what the data actually shows.

Historical Appreciation: The Numbers

Between 2015 and 2024, the WatchCharts Overall Market Index rose approximately 65%, with the sharpest gains concentrated in 2020-2022 during a speculative boom driven by stimulus spending, social media hype, and supply constraints. After the correction of late 2022 and 2023, the market settled roughly 20-30% below its peak but remained meaningfully above pre-pandemic levels.

Certain references dramatically outperformed. The Rolex Daytona 116500LN in steel appreciated over 100% from its 2016 retail price. The Patek Philippe Nautilus 5711/1A rose from approximately CAD $35,000 at retail to over CAD $150,000 at its peak. The Audemars Piguet Royal Oak 15500ST saw similar trajectories.

But these are the outliers. The broader market tells a different story.

What Most Watches Actually Do

The majority of luxury watches -- even from prestigious brands -- depreciate after purchase. A new Omega Seamaster purchased at retail for CAD $7,500 will typically trade at CAD $4,500-$5,500 on the secondary market within a year. A TAG Heuer Carrera might lose 30-40% immediately. Even many Rolex models, purchased at retail, trade at or slightly below retail on the pre-owned market once the initial waitlist frenzy subsides.

The watches that appreciate represent perhaps 5-10% of the total luxury watch market. Understanding which pieces fall into that category -- and why -- is the entire game.

Watches vs Stocks vs Real Estate

Over the past 20 years, the S&P 500 has returned roughly 10% annually. Canadian real estate in major markets has averaged 5-8% annually. Gold has returned approximately 8% per year.

Luxury watches, as an asset class, are difficult to benchmark because there is no single index. But the Knight Frank Luxury Investment Index, which tracks high-end watches, showed a 108% increase over the decade ending 2023 -- roughly 7.5% annualized. That puts top-tier watches in the same neighbourhood as gold and Canadian real estate, but below equities.

However, watches carry costs that financial assets do not: insurance (typically 1-2% of value annually), servicing (every 5-7 years at $500-$2,000+), and storage. They also lack the liquidity of stocks -- selling a watch at fair market value can take days to weeks, and dealer buy prices typically sit 15-25% below retail market value.

The Real Advantage

Where watches do outperform is in tangibility and enjoyment. You cannot wear an index fund. A Rolex Submariner on your wrist provides daily utility and pleasure while simultaneously retaining or appreciating in value. For Canadian collectors, there is also no capital gains tax on personal-use property sold for under $1,000 in proceeds, though watches above that threshold are technically taxable.

Which Brands Actually Retain Value?

The data is clear on the hierarchy of value retention:

• Tier 1 -- Consistent appreciation: Rolex, Patek Philippe, Audemars Piguet. These three brands account for the vast majority of watches that hold or gain value over time.
• Tier 2 -- Strong retention: Cartier (select models), Richard Mille, F.P. Journe, A. Lange & Sohne. These hold well but appreciation is model-dependent.
• Tier 3 -- Moderate retention: Omega, IWC, Jaeger-LeCoultre, Tudor. These typically depreciate initially but stabilize and can appreciate over long holding periods.
• Tier 4 -- Significant depreciation: TAG Heuer, Breitling, Panerai, Hublot. Most models lose 30-50% in the first few years.

Browse our Rolex and Patek Philippe collections to see current market pricing on the strongest performers.

The Risks Nobody Talks About

Watch investment carries risks that enthusiast communities tend to minimize:

• Market corrections: The 2022-2023 downturn erased 30-50% of value from many hyped models. Speculators who bought at the peak are still underwater.
• Condition sensitivity: A single scratch on a dial, a missing box, or a non-original part can reduce value by 10-30%.
• Counterfeits and fraud: The pre-owned market is plagued by "Frankenwatches" assembled from mixed parts, redials, and outright fakes.
• Brand policy changes: Rolex increasing production, Patek launching a new model, or a brand changing its distribution strategy can shift values overnight.

The Sensible Approach

The collectors who do well financially tend to follow a simple principle: buy what you love, from the right brands, at the right price, and hold for the long term. They are not day-trading watches. They are acquiring pieces they genuinely want to wear, from brands with proven track records, and they are buying at or below fair market value on the pre-owned market rather than paying retail premiums.

If a watch appreciates, that is a bonus. If it holds its value, you have effectively worn a beautiful piece of engineering for free. That is the real investment case for luxury watches -- not speculative flipping, but intelligent acquisition of wearable assets that hold value while enriching your daily life.

Ready to explore watches with strong value retention? Consult with our team about which pieces align with both your taste and your investment goals.