The coronavirus crisis has shaken the entire economy, and the watch industry is no different. The crisis will certainly leave its mark: The end of Baselworld is nigh, licensed dealers are closing, and there seems to be a general decline in overall demand. Some brands have been bold enough to debut new releases on their websites and elsewhere despite the turmoil, but most of the industry giants have been playing it safe. Patek Philippe, for example, has decided to skip this year’s debuts and postpone all new releases until 2021. It remains up in the air whether or not Rolex will unveil anything new this year. So far, the famous Swiss manufacturer has postponed their new releases until further notice. But what does all of this mean for existing Rolex models? Is this crisis enough to finally burst the Rolex bubble? Or is the brand with the crown logo immune to the economic upheaval? We dug into our Chrono24 market data to find answers to these questions and more.
Signs the Rolex Bubble Could Burst
If you look at Chrono24’s figures, there are two indications that may suggest the bubble is ready to pop. First, the number of Rolex models listed for sale on Chrono24 has risen by 4.8% in 2020 compared to the previous year. This could signal that some Rolex owners are presently looking for more liquidity. If the number of Rolex watches listed for sale increases significantly, it could impact both the brand’s image and prices. After all, prices tend to fall if supply outpaces demand.
Let’s take a closer look at the performance of some popular Rolex models, such as the Rolex Daytona 116500LN, Rolex GMT-Master II Pepsi 126710 BLRO, Rolex GMT-Master II Batman 116710 BLNR, and the Rolex GMT-Master II Lunette Noir, which was first introduced in March 2019. In the first quarter of 2020, each of these models experienced a slight decrease in value. Is this the start of a downward spiral or just a transient slowdown?
Signs the Rolex Bubble Won’t Burst
While the aforementioned models have depreciated slightly in value, other Rolex models have enjoyed stable prices or even upward price trends. Some examples include the Rolex Datejust 1601 and the Rolex Air-King 5500, both of which have seen slight appreciation since March 2020. Prices for the Rolex Explorer II 16570, on the other hand, have been stable for months, as have prices for the Rolex Submariner Date 16610, which has seen a slight upward trend.
Moreover, while the total number of Rolex listings on Chrono24 has risen, the average sales price has more or less stayed the same at -1.8%.
If we compare the number of purchase requests in the 4th quarter of 2019 to the 1st quarter of 2020, interest in Rolex watches has actually increased by 7.8%. We are, therefore, not in a situation where supply is exceeding demand. On the contrary, the average price suggestion has risen by 5% in the first quarter of 2020, meaning potential buyers are generally willing to pay more to get their hands on a Rolex. That certainly speaks against the idea of a bubble ready to burst.
It is notable that prices for models that were trading far above their list prices last year have lost some of their momentum. These include the Rolex Daytona 116500LN, Rolex GMT-Master II Pepsi 126710 BLRO, and the Rolex GMT-Master II Batman. That said, you have to remember that the current market price for each of those watches is still significantly above official list prices. These timepieces certainly won’t lose any of their popularity or desirability in the near term.
On the other hand, models like the Rolex Datejust 1601, Rolex Air-King 5500, and Rolex Submariner Date 16610 have enjoyed remarkably stable prices or even slight upward trends. This more or less rules out any talk of a bursting bubble. The performance of individual watches is always subject to minor fluctuations and this can impact pricing trends, but in this case, we can hardly speak of major changes or even a drop in interest in Rolex watches. Plus, Rolex knows better how to maintain its status and desirability than any other brand. The coveted Swiss manufacturer announced a while back that they will reduce their production numbers by 20% in 2020. It’s a smart move in these uncertain times and will help ensure supply doesn’t surpass demand – an essential balance that maintains the coveted status Rolex fans appreciate so much.