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For years, the popular narrative has suggested that Millennials are a generation that values...
Intrinsic value and Intangible value
The value of a luxury watch, a luxury bag or luxury jewelry derives its value from
1) Intrinsic values and 2) Intangible values
Intrinsic: Cost of materials, production, labor, shipping, etc.
Intangible: Brand & product perception, demand for the product, scarcity
The secondary market for luxury watches has appreciated significantly over the years, with the Patek Philippe Nautilus in steel being a notable example. The price of a Nautilus ref. 3700 has appreciated over 4000% from 1976 until today, while Gold appreciated by nearly 2000%.
However, the value of a luxury watch is just the rational factor enthusiasts and buyers consider. Emotionality is often the main factor. Watches can hold emotional value for the owner and are often appreciated for their aesthetic and craftsmanship. Today there is a growing conversation around the value and investment aspect of watches with many sources contributing to the conversation.
Total market value of all luxury watches in circulation
If you estimate the value of all the luxury watches sold over the last 30 years or so that are in circulation, you end up with a total value of CHF 1,100 billion. In our calculations, we have taken into account the decline in the value of most watch models. The majority of the total value thus comes primarily from the ten or so largest Swiss watch brands and their iconic and highly demanded watch models / references.
We estimate that the total market value of hard luxury goods is among the largest asset values that is nearly untapped by credit penetration today.
If you consider the real estate market, car market, office equipment, precious metals, all those markets are well saturated today with financing products and solutions. If financing was not available in those markets the liquidity would be significantly lower and the market values as well.
Vice Versa this large upside potential is still untapped within the market of hard luxury goods. Yourasset in collaboration with its partners are aiming to change this and bring the benefit of debt capital to the luxury market.
