Christie’s luxury goods auctions around the world include jewelry, timepieces and handbags, with sales totaling US$590 million in the first six months of 2023.

Luxury watches often maintain market appeal over time, irrespective of the common advice to go for watches with a famous history for price stability and appreciation.

Jakarta-based entrepreneur Ryco Haryanto recalls how his watch collection began with a humble set of G-Shocks back in 2015, before he eventually moved on to Seiko and finally to fine Swiss watches.

“Even though I only started with G-Shocks, when I sold them, I made a lot of profit,” Ryco told The Jakarta Post on July 26.

Ryco said the current watch market was not unlike the stock market.

The supply of used watches was rising, while demand was currently weak, leading to declining watch prices, he acknowledged. However, he felt confident that high-quality watches, such as Rolexes, would rebound.

Ryco had a word of advice for luxury watch investors, buy the Rolex you want, so that, even if its market value declines, its personal value will not. "In the next three years, the retail value of a Rolex should go back up and be as steady as before," Ryco predicted.

Among the range of eye-catching luxury goods, consulting firm Deloitte says, Chanel handbags stand out as stores of value, with low price volatility of between 2.5 and 5 percent annually and returns averaging 4.5 to 6.5 percent.

Research by the company suggests that Karl Lagerfeld-designed Chanel handbags will continue to benefit from a scarcity over the next few years.

After a surge in 2021, prices for the most in-demand used timepieces fell sharply amid economic worries and the crash in cryptocurrencies, Bloomberg reported on July 25.

Market volatility notwithstanding, however, the returns on watches can beat those on stocks. According to the WatchCharts index, the appraised value of luxury timepieces traded on the secondhand market dropped by 8 percent in 2021. That beats a 19 percent drop for the S&P 500 stock index and a decline of 65 percent for Bitcoin, as Bloomberg reported.

Hermès Birkin bags and a Chanel surfboard on display on June 04, 2021, during a press preview of the Luxury Week at Christie's in New York City, the United States. (AFP/Getty Images/Cindy Ord)

Go classic

Merchants and collectors agree that investors ought to opt for classic items, whether bags or watches.

The owner of marketplace and bag-rental service Lavergne, Edha Laureen Clarissa, claims that the price of handbags has tripled over the past few years. When the first Chanel 2.55 was released in 1955, it cost $220; presently, it costs more than $10,000, with the smaller variant costing less than that.

A new Chanel Classic Medium now costs $10,200, marking a 16 percent increase from 2022, with rising labor and material expenses also pushing prices upward. Edha believes secondhand prices will follow suit. Thus, if their condition is pristine, secondhand bags can keep their value and even increase over time, “so there is no loss from the buyers' perspective.”

She recommended buying vintage objects now rather than later and shared more tips for buyers: “Bags with traditional colors will always be in high demand among collectors, […] but if you want to have a seasonal one, I recommend purchasing a limited edition.

Andini, a watch dealer with outlets in Belgium and Bali, underlines the importance of doing one’s research before making a purchase. He recommends that people carefully consider the particular timepieces they want to buy. A watch with an illustrious and long history, in Andini's opinion, tends to hold its worth over time and will often increase in price.

Andini maintains that watches from brands like Rolex, Cartier and Omega will tend to hold their value best over time. Most watch prices had "risen by about 7 or 8 percent so far this year" he said. Even a supply of 1 million new watches annually could not satisfy customer demand, he claimed.

“You should also choose the brand carefully; there are those ‘trendy’ watches that are pricey but do poorly in the secondhand market, but famous brands like Omega, Rolex and Cartier will sell out swiftly in the secondhand market, even the vintage ones,” Andini said.

“For investing, I would buy something that I really love and not think about selling it, but I would think of designs that have greater liquidity and are easier to sell, such as Rolex, Omega and Cartier, that will eventually sell within a few days.”

According to a study by Boston Consulting Group, a select handful of models, such as the Patek Philippe Nautilus, Audemars Piguet Royal Oak, Rolex Daytona and Rolex GMT-Master II, will see a rise in investor interest in 2023. When acquired secondhand, these variants sometimes cost up to 200 percent more. A Rolex Cosmograph Daytona, which retails for $14,800, has recently ranged from $24,250 to $38,500 on used watch swap sites.

Secondhand and vintage

Andini, who has been selling used watches in Indonesia for over 20 years, is convinced that the Indonesian luxury watch market has untapped potential.

Given the high cost and slim probability of obtaining new pieces, Andini suggests that aspiring collectors begin with old and used items.

“Most people are going to opt for the gray market to get it. Some people move to vintage watch collections, because vintage watches are more affordable,” Andini said.

“With a vintage Omega, the price will not be that crazy; and with a vintage Cartier, the demand has also increased in the past two to three years, especially for the Santos and Tank models.”

Edha concurred, stating that, based on the design and condition, similar considerations would apply to the cost of used handbags.

“The trend of bag prices that I see is always increasing, thus [the appeal of] the secondhand price. That is why it’s a must for people to keep their bags in mint condition,” she said.

“You really need to buy what you love. Let’s say tomorrow there’s a global economic crisis, the watch price will go down, but you’ll still love it,” Andini added.