"The price is what you pay, the value is what you get", goes the saying. In a developing market for luxury watches, with a still growing audience of buyers the price part is easy to explain. As Aurel Bacs, chief auctioneer at Phillips watches, explained in our recent Instagram Live session the Geneva auction on June 27 and 28 attracted more than 1500 registered online bidders, a new record.
When we realize that 20 years ago the watch collecting community was concentrated around a relatively small group of collectors in Germany, Italy and the US and today it's a global game with a wider and wider growing audience, it's explainable why a Patek Philippe 2499 Perpetual Calendar, widely acknowledged as one of the most important watches ever made, is so valuable. Only 349 were made over a 34 year period, and when the potential buyers pool grows from a handful of people 20 years ago to several thousands right now, the price rises accordingly. Hence the CHF 2,600,000 paid for Mr. Bivers example at Phillips.
And the value? Well, it's scarcity that works. 349 were ever made, and every time one enters the market collectors are waiting in line with their check books. If you miss the boat, good luck finding another one. That defines the value.
Phillips also auctioned a Nautilus 5976/1G, the 44mm white gold anniversary edition from 2016. Initially priced at $ 96,390, the 1300 pieces were sold in a blink of an eye. On Saturday the hammer fell at CHF 487500 ($ 511000). That was the price. But does it reflect the value, created by a bidding war between collectors picking up the scarce last pieces?
With 45 examples of the 5976/P currently offered for sale at Chrono24, most of these offered between CHF 265,000 and 320,000, scarcity can hardly be the issue here. At least 3,5% of the total production (and that's probably a very conservative guess) did not end up at a collectors wrist, but became an instant "investment piece", meant to make a profit in the secondary market.
Lot number 75 was a 2018 Rolex GMT-Master II 126710BLRO, aka Pepsi. This aftermarket darling can be picked up at a market price of around CHF 15-16,000, and Chrono24 shows 302 examples for your consideration. Someone completely ignored that reality and was willing to pay CHF 33,750..
Were the buyers caught in the heat of the moment, paying way above market without doing any research? Possible but not probable. When the value is not created out of growing demand and scarcity, the price should be pushed to a higher level, in the hope the market follows. It's simple as that.
photos courtesy of Phillips Watches