Written

For

The

Australian

-

Why

the

luxury

watch

market

is

recovering

and

what

you

need

to

know

before

investing

Would you park $200,000 of your retirement savings on your wrist? Well, technically you can't — but you can park it in a vault, insured and unworn, if you buy through your SMSF. And that's exactly what a growing number of collectors are asking me about.

The luxury watch market has had a wild ride. Post-Covid, Patek Philippe and Audemars Piguet doubled in value, Rolex jumped 50 per cent, and then reality set in. Prices tumbled back to pre-pandemic levels. But last year, the Bloomberg Subdial Watch index climbed 7.5 per cent, with bargain hunters and soaring gold prices reigniting the market. Rising Swiss tariffs and a new wave of Millennial and Gen Z buyers — 40 per cent of whom say they'll purchase a pre-owned watch in the next year — suggest the recovery has legs.

Here's the interesting bit from the Deloitte study I dug into: only one in four people buy a watch to tell the time. Over half buy it to look good or as a reward. Just 11 per cent buy for investment. That tells me brand appeal trumps horological wizardry — which is why Rolex dominates a third of secondary market sales.

If you're eyeing this through your SMSF, tread carefully. The rules are strict: no personal use, no storage at your home, mandatory insurance, updated investment strategy, and trustee minutes documenting where it's kept. You cannot wear it. Ever. That Daytona sits in a vault admiring itself.

As an avid collector, my picks range from a limited-edition Omega x Swatch at the entry level, through a vintage Rolex Submariner or GMT-Master II, up to a Patek Philippe Aquanaut for those with deeper pockets. But remember — watches produce no income. Your only return is capital gain, and only if the market keeps ticking upwards.

Just because you can, doesn't mean you should.