Even though collectors increased spends on rare, million dollar watches from Rolex and Patek Philippe at auctions in the first half of 2023, leading houses recorded a slowdown in sales
If one had to analyze the recent fluctuations in the luxury watch market, there should be two main “eras” to consider – pre and post-Covid. The pandemic-induced lockdowns in 2020 kickstarted the most spectacular run in the history of luxury watches. Thanks to the scarcity of timepieces at retail, the secondary market started to peak with key watches trading at over five times their retail value. The top four auction houses – Phillips, Christie’s, Sotheby’s and Antiquorum – recorded sales worth $347 million. In 2021, these numbers jumped to an unprecedented high of around $600 million. Buoyed by year-around online sales and the ballooning appetite of a new, younger audience, auction houses rejoiced in the glory of the post-pandemic boom.
As one nearly got used to this month-on-month growth in the secondary watch market, the crypto-world collapsed. Things started to cool down towards the end of last year with prices for hype watches like the Rolex Daytona dipping down as much as 50%. That of course didn’t mean a complete collapse or price drops below retail, it was just the market returning to reality.
According to The Mercury Project’s latest Hammertrack report, global watch auctions hosted by Antiquorum, Bonhams, Christie’s, Phillips, Poly Auction and Sotheby’s recorded sales worth CHF 312 million in the first half of 2023 – 18% lower than last year. While these numbers are still higher than 2021 levels, the report states that despite the exceptional provenance and rarity of some lots, the Spring auctions reported a 23% dip as compared to last year. “The quarter generated only CHF 266,7 million, far below the CHF 346,8 million achieved last year,” it states.
Although some big numbers were clocked this year, the overall results weren’t as euphoric as the highs experienced in 2022. The Hammertrack report attributes these changes to a couple of factors, including the growing obsession of collectors with extremely rare timepieces. “Despite a 10% fall in the number of lots sold this year (6,201 lots compared to 6, 870 in H1 2022), the market is showing good maturity in its premiumization,” the report states. Interestingly, it was the million dollar watches that pulled up the auction sales at most places. In the last six months, the value of millionaire lots at auctions has gone up by 38% as compared to last year. “35 exceptional and sometimes unique lots surpassed the 1 million level, compared to 29 in the same period a year ago. Surprisingly, unlike previous years, the top 10 millionaire lots came from established brands, leaving only two places for independents – Roger Smith and F.P. Journe,” states the report.
While no one is doubting the inherent strength of the luxury watch market, it is undergoing a much-needed price stabilization at the moment, which is more in-line with the value of watches from two years ago. “I think even though the prices for Audemars Piguet, Patek Philippe and Rolex went down the most over the past year, one should bear in mind that during Covid, they went up the most and these prices are so much higher than pre-Covid levels. I still believe that these are gateway watches, however, strong, independent brands will continue to kill it this year,” says Austen Chu, CEO and co-founder, Wristcheck. “I think the overall demand, at least at Wristcheck, has increased. But then again, prices have to be a lot more realistic. And since these watches are now a lot more attainable – whether you're buying modern or vintage – versus two years ago, we have more buyers than ever. Also, our clients are getting younger and younger, which is an incredible sign,” he says.
Collectors’ Vying For Genuinely Rare Timepieces
As per the Hammertrack report, one of the prime reasons behind the recent drop in auction results is the “dramatic fall of the six-figures lots''. Once considered as the core business for most auction houses, this segment now accounts for just 45% of the total market as compared to 57% a year ago. While the lower segment of the market (below CHF 100,000) also reported a 12% drop in sales, the millionaire lots actually did the revenue heavy lifting for auction houses across the globe. In fact, the total total value of millionaire lots sold this year has already touched CHF 77.2 million – 38% more than the year before. Right from the incredibly rare, 86-year-old Patek Philippe Reference 96 Quantieme Lune, once owned by the by China’s last emperor to the stunning Patek Philippe Ref. 2523 with a cloisonné enamel dial depicting North America, there were a bunch of legitimately rare and important watches to bid for in the first half of this year. “I think more watches going for a million is just a testament to the rarity and the quality of those pieces. If you're buying something super rare, super in demand or something almost impossible to find, you'll almost always do well, especially if it's an AP, Patek Philippe or Rolex,” says Chu.
Christie’s Takes Over Phillips As The New Market Leader
Best known for its highly curated live sales that usually achieve much higher prices per lot than its competitors, Phillips slipped to the second position over the last six months. Christie’s, the new market leader in auctions, secured the pole position with 16 millionaire lots instead of 7, seen last year. The auction house also hosted more events this year (18 in all, as compared to 13 in 2022). According to the Hammertrack report, during the spring auctions in Geneva, Christie’s reported '' total sales of CHF 45.8 million, up 62%, ahead of Sotheby’s and Antiquorum, but just below Phillips”. It also led the market in Hong Kong, with impressive sales of CHF 51.1 million, including two Patek Philippe lots that made it to the top three watches sold in auctions in the first half of 2023.
Despite ranking below Christie’s, Phillips maintained its 33 % market share. With a total of 8 events to its credit, the auction house recorded sales worth CHF 103.3 million, almost 16% lower than last year. However, it continues to be the market leader in the Americas, thanks to multiple records achieved for top models from Patek Philippe, Rolex, Zenith, Cartier, and Roger Smith. “As confirmed by the highest price per lot (around 134,000 CHF), Phillips’ excellence in terms of the quality and rarity of the lots offered, remains undisputable,” states the report.
Patek Philippe And Rolex Continue To Outshine The Rest
While last year, the leading auction houses hosted 15 events that generated sales of over 10 million CHF in the first six months, this year, there were only 10 events and the number of lots sold per event also went down significantly – 65 as compared to 107 in 2022 and 123 in 2021. However, top lots from Patek Philippe and Rolex brought it in the magic numbers for most auctions. It is no news that Patek Philippe continues to rule the pole position in the auction world with sales worth a whopping CHF 104.7 million in the first six months of 2023. Although this number was down 18% compared to last year, its 18 lots sold in the millionaire segment accounted for 45% of its lots sold above CHF 100,000, compared to 24% one year earlier.
One of the most trusted watch brands globally, Rolex accounted for 9 lots were millionaire lots as compared to 6 in the first half of 2022 and only 1 in the first half of 2021.Together, Rolex and Patek Philippe accounted for 65% of total sales above CHF 100,000, compared to 58% in 2022. In May, Sotheby's sold a gold 6241 "John Player Special" for CHF 2.23 million and Phillips sold a diamond-set 6270 for CHF 3.69 million. There was another rare Milgauss 6541 with a black honeycomb dial at Phillips that sold for an eye-popping CHF 2.24 million.
A close third, F.P. Journe recorded sales totalling CHF 34.4 million, compared to CHF 36.1 million for Rolex. The Indies it seems are going for a strong second half with Richard Mille at number 4, Roger Smith at number 6 and Philippe Dufour at 8. While AP slipped from the second position to the fifth with just 36 lots above 100,000 CHF as compared to 163 last year, Breguet climbed up three positions to be at number 10 at CHF 1.5 million this year.
Welcome Roger Smith: The Newest Entrant In the Top 10 Millionaire Lots
In June, Phillips auctioned one of the most important modern watches made by British legend, Roger Smith. Presented on a 66.5mm yellow gold case and featuring a perpetual calendar, a tourbillon, and a hand-wound movement with a spring detent escapement, Smith’s Pocket Watch Number Two hammered for $4.9 million – setting a record for any British timepiece. “I think we didn’t sell too many Roger Smiths before 2021. I believe we sold the first one – a Series 2 – for around USD 150,000 in Hong Kong in 2016. Then we didn’t get another one until May 2021. It was a very, very rare, rectangular watch that many people didn't even know existed – the Roger Smith Series 1 “Theo Fennel”. It set a world record at that time, selling at CHF 541,000. It was the post COVID period when interest in watches reached levels that no one had ever imagined, especially for independent watchmakers such as F.P. Journe, De Bethune, George Daniels and Roger Smith. So the May 2021 result was a bit of a surprise, especially considering our conservative auction estimate. We had listed it at CHF 40,000 - CHF 80,000. It did more than 10 times the estimate,” said Paul Boutros, Head of Watches, Americas for Phillips, in a previous interview with Wristcheck.
Editor's Note: The data source is The Mercury Project's latest Hammertrack Report.
