Patek Philippe Mania: Are we just at the beginning or the beginning of the end?

Thoughts one year after lock-down: John Reardon reviews what is happening to the Patek Philippe market and what it means for you

The last 12 months have been an extraordinary time for watch collecting and rising values have many in the watch world asking, ‘What next?’. With current watch production and distribution heavily disrupted, and the overall rising tide of interest in watch collecting, we are seeing billions of dollars flowing into the pre-owned and vintage watch collection world in a relatively short period of time. The result is rising demand for a dwindling supply of watches. Estimates range that the entire vintage and pre-owned watch world has an annual turnover of 10 billion – 20 billion USD. Others believe that this is a highly conservative estimate and it is in fact is closer to 40 billion USD. Interestingly, with watches alone, all the major auction houses have an annual turnover combined of ‘only’ 350 million USD. Consequently, what we see sold publicly is just the tip of the iceberg of this massive global marketplace.

Patek Philippe ref. 5711/1A
Impossible to predict: who would have thought that a steel, time-only Patek Philippe sports watch would sell for six figures? The ref. 5711/1A. Image credit: Collectability

The results we saw last year of Patek Philippe at auction are impressive to say the least. The auctions showed record after record being broken, and within the dealer/collector community we have seen extraordinary numbers as watches change hands quickly and discreetly. From modern production ‘impossible’ to buy timepieces such as the ref. 6002G Grandmaster Chime to vintage iconic pieces such as the ref. 1518, it is safe to say that the trophy watches of past and present have at least doubled in value over the past year. Even more humble offerings from Patek Philippe are bringing impressive numbers within the modern resale market as well as the vintage market. Basic Calatrava watches, modern and vintage, are securing prices we have never seen before. And the whole steel watch mania? That’s another story but no one expected to see the ref. 5711/1A bring over six figures! So how has this happened and where is it going?

Patek Philippe ref. 2499 and ref. 1518
Impossible to find: the now super-rare Patek Philippe ref. 2499 (left) and ref. 1518 (right).

The short answer is we are experiencing the Patek Philippe perfect storm. As an advertisement from 1949 stated, or perhaps predicted, “Patek Philippe, What can be a finer investment?” Patek Philippe literally wrote its own storyline and it took a pandemic to let the secret out. With historically small production numbers, unparalleled quality, diverse offerings, and a relatively tight control of distribution, it is the ideal equation that Patek Philippe is recognized as the ultimate status watch. Even in pop culture, we are seeing a significant uptick in the popularization of Patek as the ‘must-have’ watch. The fact that Patek is mentioned in more songs than Rolex these days would have been unthinkable a few years ago! Even when I was working for Patek in the early 2000s, many people (especially in the US) had never heard of Patek Philippe. Today, ask a random kid about Patek Philippe and the response you will get will be a knowing smile and a TikTok ignited “Too Much Sauce …”. On Instagram and FaceBook etc., the social media embrace of Patek Philippe is a tsunami of obsession and passion. This all adds up to a demand for acquisition and knowledge.

Patek Philippe Ellipse ref. 3548
Always worth collecting: the classic Patek Philippe Ellipse ref. 3548. Image credit: Collectability

This is where Collectabilty comes into the story. With high demand, and literally a social media driven frenzy to own something that says Patek Philippe, perils are around every corner as new buyers enter the market and often do not know what to buy or how much to pay. And sadly, there are many fakes out there. A recent survey of some major global selling platforms quickly revealed over 20 modern fake and replica Patek Philippe pieces being offered as authentic. In the vintage world, things get even murkier when heavy restoration and replacement parts are literally everywhere on the market. Buying a watch with a major restoration is not necessarily a problem but it is good to know what you are buying and understanding what has been done to your watch. ‘An Education in Vintage Patek Philippe’ is not only our tagline, it is the way we do business. If you are buying an important watch, it is imperative you do your homework and work with a trusted partner. Collectability is here for you.

Patek Philippe ref. 3940
Lockdown appreciation: perpetual calendars like this first series ref. 3940 are becoming much more sought after over the past year. Image credit: Collectability

Today, with the relatively weak US dollar, fear of inflation and low interest rates, cash feels risky for the fortunate people who have extra funds sitting in the bank. The sentiment I keep hearing is, “It is better to have a Patek on the wrist than money burning in the bank”. Today, the pleasant diversion of watch collecting continues to intellectually challenge top collectors around the world. The treasure hunt, the homework, the pleasure of the acquisition all drive the collecting community to uncover and find the best pieces on the market. As many of us are addicted to screens, for better or worse, the collecting community is learning more, comparing more, and obsessing more than ever before. This captive audience is driving not only the market but academics to new levels we have never seen before.

Patek Philippe ref. 3970
Not as impossible to find as a ref. 1518 or 2499, the ref. 3970 has become a sort after model during this past year. Image credit: Collectability

So, what’s next? Passion investing is now intertwined with collecting. Provenance and scholarship are becoming paramount. As the biggest collectors (and many of you uber collectors are reading this) are buying up all the best watches we are seeing a consolidation of quality watches in the hands of a few. As a result, finding a quality ref. 1518 or ref. 2499 is becoming increasingly impossible. The predictable result is the collecting community is identifying other equally important historic references and we are now seeing the rise of prices across the board, not just delegated to a handful of references.

Much more appreciated: exceptional Patek Philippe pocket watches like this World Time ref. 605 HU in 18K rose gold. Image credit: Collectability

The last few months have seen impressive leaps in the demand for vintage Patek Philippe chronographs, perpetual calendars, and of course perpetual calendar chronographs as collectors race to put together verticals of milestone references that span the decades. Even time only watches are rising in value, from my beloved Ellipse to exceptional pocket watches, the best of the best are going up in price. Speaking of pocket watches, the prices of complicated pieces are also reaching new heights, with new price benchmarks being passed each month. Time will tell how sustainable this upward market will rise but time and again we have seen that Patek Philippe can weather the harshest of storms. In the end, buy the best condition, buy the rarest, buy the seller. And keep it fun! The next chapter is truly yours — and these watches will be around a lot longer than all of us. Let’s enjoy this incredible collecting category and continue to build the foundation for the future. After all, you never actually own a Patek Philippe, you merely look after it for the next generation …

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