If you want to diversify your investments and already have a property, consider buying a Rolex or other luxury watch, an expert says.
It sounds like a joke about investments: a Rolex watch can offer you better returns than a property. Only thing is it is not a joke. The Rolex wins in a struggling property market.
Michael Zahariev, co-founder of Luxity, says people must forget what they were taught about property being the ultimate safe haven. “While many South Africans still treat real estate as their holy grail of investment, a growing number are adding a timeless, tangible asset to their portfolio: luxury watches.”
He says, imagine buying a Rolex today and three years later, it is worth more than what you paid for it. That is exactly what is happening, with resale values climbing from 87.5% in 2021 to 104.9% in 2024.
“This means they are not just holding their value but appreciating beyond their original retail price. Meanwhile, your property portfolio is probably losing value faster than you can say bond repayment.”
ALSO READ: Pre-owned wins as Africa’s luxury resale market continues to grow
Study found that Rolex is better investment as it carries less risk
Zahariev says academics back this up, as a recent Swiss study found that luxury watches not only carry less risk than most traditional investments but also deliver higher returns. “Compared to property, a Rolex Submariner starts to look like far more than just a status symbol.”
Is the property party over then? He says South Africa’s once-golden property market is struggling. “Between 2019 and 2024, house prices barely crept up by 4.8%. Factor in inflation and in real terms, property values actually shrank by 0.59% each year.”
In contrast, Zahariev says, luxury goods are having their moment, with trading activity in South Africa exploding by 184% since 2019, with mid-range watches alone surging by 28% in the past year, according to the Clur Shopping index report.
ALSO READ: SA sees steady growth in pre-owned luxury market
Why is the Rolex and other watches winning the investment race?
Zahariev explains that watches offer advantages that property simply cannot, such as:
- You can start small but dream big. You can begin building a serious watch collection from around R100 000. “Meanwhile, getting into real estate means hundreds of thousands upfront, bank approval battles and transaction fees before you even get the keys,” he says.
- You can make a quick exit. You can sell a watch within days through trusted dealers, whereas it takes three to six months for a house, even with endless showings and paperwork.
- Low upkeep, as your watch only needs servicing maybe once a decade. However, with property, the bills never stop, with constant rates, insurance, a leaking roof, and the garden service.
- A watch is portable wealth. Your entire watch collection fits in a safe, while property ties you to one location and the whims of that market.
ALSO READ: Are Hermès, Louis Vuitton, and Gucci made in China? How to tell real luxury from fakes
Wait, not so fast! Not every Rolex is a golden ticket
However, Zahariev warns that not every shiny watch is a golden ticket. “Success in this space is not about luck but about knowledge. You must understand the brands, the specific models and what the market is looking for.”
These are Zahariev’s golden rules for aspiring watch investors:
- Stick to the titans: Focus on the “blue-chip” brands known for holding and increasing their value, such as Rolex, Patek Philippe and Audemars Piguet. Even within these brands, certain models (like a Rolex “Hulk” Submariner or a Patek Philippe Nautilus) are the true superstars.
- Think in years, not months: To see significant appreciation, plan to hold onto your timepiece for at least three to five years.
- Authenticity is everything: The market is flooded with fakes. Always buy from a reputable dealer who can provide authentication and papers. Your watch’s authenticity is a key part of its value.
ALSO READ: From yachts to hearses: South Africa’s rich people are pawning luxury items
Will your Rolex remain top of the heap?
Zahariev says with inflation at 3.5% and interest rates beginning to normalise, both asset classes, luxury watches as well as property, are competing for investor attention.
“We do not suggest that people abandon property investment, but for portfolio diversification, luxury watches offer attractive returns with significantly lower barriers to entry.”
