Are Luxury Watches a Good Investment? UAE Returns, Risks and Best Types

Pre-owned luxury watch prices rose 1.2% in the third quarter of 2026 on the WatchCharts Overall Market Index, the fifth straight quarter of gains above 1%. Morgan Stanley published the figures in its pre-owned market report on 13 October 2026. The same benchmark still sits about 29% below its April 2022 peak, after eleven consecutive quarterly declines. For anyone in Dubai weighing a Submariner or a Nautilus as a store of wealth, that gap is the starting point.

An investment watch is a luxury timepiece bought partly in the expectation that it will hold or grow its resale value, usually from a handful of brands with strong secondary-market demand. Recent gains have been modest and narrow. In Knight Frank's 2026 Wealth Report, the WatchCharts Overall Market index rose 5.1% in 2025, with Rolex up 4.6% and Patek Philippe up 12.1%, while the broader luxury investment index slipped 0.4%.

The UAE is a major market for Swiss watches. It accounted for more than half of the CHF 2.21 billion in Swiss watch exports to the Gulf in 2025. UAE investors can buy from authorised boutiques, pre-owned dealers, online marketplaces and international auction houses. A watch purchase is a consumer transaction, though, so it comes with none of the investor protections of a regulated investment account.

The brands that dominate the investment conversation are Rolex, Patek Philippe and Audemars Piguet, with Omega, Cartier and independent makers trading at very different levels. Against them sit the conventional alternatives: listed stocks, gold, bonds and, for qualifying investors, professionally managed private markets.

This guide explains what the 2026 secondary-market data actually shows, which watch types have held resale demand, how to calculate a watch's real return after costs, the specific risks of buying and selling in Dubai, and how watches compare with stocks, gold and bonds.

Luxury watches as an investment at a glance

Headline index gains look different once the costs and frictions that decide whether an individual watch makes money sit beside them.

Source: Everest Bands summary of Morgan Stanley and WatchCharts Q3 2026 data, Knight Frank, First Trust, Hilco Global, PwC Worldwide Tax Summaries (as of 3 November 2026)

Are luxury watches a good investment?

For most buyers, no. A small group of references from three or four brands has traded above its retail price, and anyone able to buy those at retail has historically been able to sell at a profit. Everything else behaves like a durable luxury good: it loses a slice of value the moment it leaves the boutique, it costs money to keep in good condition, and it only turns back into cash when a buyer agrees a price.

The answer depends on four prices that often get blurred together.

Price indexes and marketplace charts mostly track the second and third numbers. Your outcome is the fourth.

Owning a watch you enjoy wearing is a separate question from its investment performance. A watch that holds 80% of its value over ten years of daily wear may be an excellent purchase. It is still a poor investment if the alternative was to put the same money into a diversified portfolio.

What the 2026 secondary-watch market data shows

The most widely quoted benchmark is the WatchCharts Overall Market Index, which tracks 300 watches from 10 brands, weighted by transaction value. Morgan Stanley uses it in its quarterly research on the pre-owned market.

Third-quarter 2026 data points to a slow, uneven recovery. Of 35 brands tracked, 28 finished the quarter higher. Rolex, which makes up more than half of the index by transaction value, rose only 0.5%, its smallest quarterly gain in seven quarters.

Patek Philippe rose 2.6% in the quarter and 17.6% over the past year. A. Lange & Söhne (4.4%), Chopard (3.8%) and Vacheron Constantin (3.1%) led the quarter, while Audemars Piguet matched the overall index at 1.2%.

Pre-owned watch price changes by brand in Q3 2026, from 4.4% for A. Lange & Söhne to 0.5% for Rolex.

Three things limit how far these numbers can be stretched:

• Sample bias. The index follows the most traded references from the biggest brands. Thousands of models that sell rarely, or sell well below retail, sit outside it.
• Pricing assumptions. Index levels are estimates built from market data, before the dealer margins, commissions and repair costs an individual seller faces.
• Currency. Index data is quoted in US dollars. Because the dirham is pegged to the US dollar, currency moves matter less for UAE investors than for buyers in Europe or Asia.

The longer view is less flattering. Rolex's average resale price climbed from about US$7,185 before the pandemic to a peak near US$17,206 in March 2022, and the wider market spent almost three years falling from that high. A buyer who paid peak prices in 2022 is still, on average, sitting on a loss.

Which watch types tend to retain resale demand?

Resale strength belongs to the individual reference. Two watches from the same brand can trade at very different levels depending on material, dial, production volume and how long the model has been in the catalogue. Only three brands in Morgan Stanley's latest report traded above retail on average at the end of September 2026.

Secondary-market premium or discount to retail at the end of September 2026: Patek Philippe +16.3%, Rolex +10.3%, Audemars Piguet +5.9%, other brands at least 25% below retail.

Rolex sports references

Rolex is the reference point for the whole market, and its steel sports models (the Submariner, GMT-Master II and Cosmograph Daytona) have the deepest pool of buyers in the UAE and abroad. At the end of September 2026 Rolex traded at a 10.3% average premium to retail on the secondary market.

That premium is shrinking as supply loosens. Rolex's Certified Pre-Owned programme sold an estimated US$229 million of watches in Q3 2026, up 61% year on year, through 167 participating retailers. More official pre-owned supply gives buyers a warrantied alternative to grey-market dealers and adds competition on price.

Patek Philippe collector references

Patek Philippe has outpaced Rolex in both 2025 and 2026, and traded at a 16.3% premium to retail at the end of September. The Nautilus and Aquanaut drive most of that. The discontinued Nautilus 5711 retailed at around US$34,000 and traded between about US$113,600 and US$147,700 in early 2026.

The catch is the entry ticket. Buying at those secondary prices locks in the premium someone else has already earned, and a five- or six-figure watch carries authenticity risk proportional to its price. Patek also cut US retail prices by 8% in early 2026 after two years of increases, which shows how quickly the reference point can move.

Audemars Piguet Royal Oak

The Royal Oak carries Audemars Piguet's secondary value, and the brand held a 5.9% premium to retail at the end of September 2026. Momentum has cooled: AP pieces failed to reach 80% of their average high estimates at the November 2025 Geneva auctions. Condition matters more than usual here, since the integrated bracelet and brushed finishing show wear and are expensive to restore. Production changes to a reference can also reset demand for older versions.

Omega, Cartier and other brands

Outside the top three, the numbers turn negative on average. Every other brand in the Morgan Stanley report traded at least 25% below retail at the end of September, even though Cartier rose 2.4% and Omega 0.6% during the quarter. Specific references (a limited Speedmaster, a vintage Tank, an independent maker with a waiting list) can still hold value, but buyers should judge each one on its own sell-through record. Brand strength alone has not been enough to keep most watches above retail.

How to calculate the real return on a watch

A watch's return is only real once costs come out. Use this formula:

Net return = (net resale proceeds − purchase cost − servicing − insurance − storage − taxes where applicable) ÷ total cash invested

Say you buy a watch for AED 40,000 and sell it a few years later for AED 43,000. On paper that is a 7.5% gain. Then the costs arrive.

Example only. Assumes an 8% selling cost and AED 1,000 of maintenance, with no insurance or storage costs and no allowance for inflation.

The resale price beat the purchase price by AED 3,000, and the owner still lost money. Add insurance for a few years and the loss grows. Inflation erodes the real value further. With the CBUAE Base Rate held at 3.9% in October 2026, even cash in a deposit or money market fund earns interest over the same period without any of these frictions.

Worked example: an AED 40,000 watch sold for AED 43,000 ends in an AED 1,440 loss after an 8% selling cost and AED 1,000 of maintenance.

Selling costs are the variable that most buyers underestimate. A dealer buying for stock needs a margin, and a long-standing client trading in may receive 80 to 85 cents on the dollar. Selling privately narrows that gap but takes longer and exposes you to payment fraud.

What drives watch prices up or down?

Watch prices respond to manufacturer decisions, supply and the wider economy. Seven factors do most of the work.

1. Scarcity and allocations. Brands control supply through authorised dealers. When waiting lists shorten, secondary premiums fall.
2. Retail price increases. Each list-price rise lifts the reference point for pre-owned pieces. Rolex raised prices by 5% on gold references and 2.5% on two-tone references on 1 June 2026.
3. Precious-metal prices. Gold passed US$5,000 an ounce for the first time in January 2026, pushing up the cost of gold watches at retail.
4. New releases and discontinuations. A discontinued reference can jump as supply stops; a redesigned successor can pull demand away from the outgoing model.
5. Condition, box and papers. Documented watches typically sell for 10% to 30% more than undocumented equivalents, and over-polished cases lose value.
6. Servicing history. Rolex recommends a service interval of around 10 years and gives new watches a five-year warranty. A recent manufacturer service with paperwork supports the price; third-party parts reduce it.
7. Dealer inventory and sentiment. When dealers hold too much stock, they discount to clear it, and the index follows.

Risks of investing in watches in Dubai

Dubai offers wide choice and competitive pricing. The risks of holding watches as an asset are the same here as anywhere, plus a few local ones.

Counterfeits and fraud

High-quality fakes are the largest single risk at the top of the market. In one case, Dubai Police seized 30,000 fake luxury watches valued at AED 1.2 billion from two apartments in January 2021. Modern counterfeits can include genuine-looking papers, and "franken" watches mixing real and aftermarket parts are harder still to spot.

Spreads and illiquidity

A watch has no live market price. Selling means finding a buyer, negotiating and accepting a dealer's margin or a platform's fee. In a weak market, a dealer may discount pieces still unsold after 180 days, which means a forced sale can land well below index levels.

Taxes and import costs

The UAE levies 5% VAT on most purchases, including new watches, and that cost is usually lost when you resell privately. VAT-registered dealers can use the profit margin scheme for second-hand goods and collectors' items, which taxes their margin instead of the full price. Watches brought into the UAE from abroad can attract customs duty of 5% of the CIF value, and the destination country's duty and VAT apply if you sell to a buyer overseas.

Theft, insurance and warranty

A watch kept at home needs specialist insurance, and many policies require a safe or bank vault. Grey-market purchases may come with a dealer warranty only, and some manufacturers limit service or warranty support for watches bought outside their authorised network.

No income

A watch pays no dividends, coupons or rent. All of the return has to come from price appreciation, after costs.

Due diligence before you buy

• Check the serial and reference numbers against the papers and the case, and ask the brand or an authorised service centre to confirm where possible.
• Pay for an independent inspection of the movement, not just the dial and case.
• Buy from sellers with a verifiable trading history and a physical address in the UAE.
• Use traceable payment methods and avoid cash deals arranged on social media.
• Insure the watch from the day of purchase, with a valuation in writing.

Luxury watches versus stocks, gold and bonds

Watches compete for the same money as conventional assets, and the comparison is mostly about costs, liquidity and income. Over 2025, the WatchCharts index gained 5.1% while the S&P 500 delivered a 17.9% total return. One year is a short window. The structural differences between the assets hold in any year.

Source: Hilco Global, First Trust (as of 3 November 2026)

Costs on the listed side are low and visible. On StashAway, for example, managed portfolios charge 0.2% to 0.8% a year depending on the amount invested, and the underlying ETFs average around 0.2% a year. For readers who want metal exposure, the best gold investment options in the UAE range from bullion to ETFs, and investing in the S&P 500 from the UAE takes a brokerage or managed account and a few minutes.

Passion purchases and retirement planning work best with separate budgets. Buy the watch you want to wear from money you will not need back, and keep the money meant for long-term goals in assets built for that job. The case for spreading wealth across many holdings is laid out in StashAway's note on why to diversify, diversify, diversify.

Invest in professionally managed alternatives with StashAway Private Markets

Part of the appeal of watches is owning something outside the stock market. Private markets offer that kind of diversification through regulated funds, with professional managers doing the sourcing, due diligence and valuation, and without the authentication, servicing and resale spreads that come with a watch.

StashAway Private Markets gives eligible investors access to three asset classes, each through multiple leading managers in one semi-liquid portfolio with no multi-year lock-up:

• Private Credit: senior secured lending, with an 8% to 10% a year asset-class target. The Private Credit portfolio invests in a fund managed by Hamilton Lane.
• Private Equity: a diversified portfolio of private companies, with a 10% to 12% a year asset-class target.
• Private Infrastructure: energy, transport, digital networks and utilities, with a 10% to 12% a year asset-class target.

The minimum is US$20,000, with no sales charge. These products are open only to DFSA Professional Clients who opt in, for example individuals with US$1 million or more in net assets excluding their primary residence, or with relevant experience in the financial sector. Verification typically takes one to three business days, and opting in reduces some regulatory protections. For investors with US$100,000 or more invested, StashAway Reserve adds a dedicated Wealth Advisor who can discuss whether private markets fit a wider plan. StashAway's note on private credit tailwinds covers the asset class in more depth.

Target returns are asset-class targets, not guarantees, and capital is at risk. StashAway operates in the UAE as StashAway Management (DIFC) Limited, regulated by the DFSA under licence F006312.

Frequently asked questions

Which Rolex models hold their value best?

Steel sports models have the deepest resale demand, led by the Cosmograph Daytona, GMT-Master II and Submariner. As a brand, Rolex traded about 10% above retail at the end of September 2026, but individual references vary widely, and precious-metal and dress models usually trade nearer to or below retail. Check recent sold prices for the exact reference and dial before buying.

Do luxury watches outperform the S&P 500?

Not on recent evidence. In 2025 the WatchCharts Overall Market index rose 5.1% against a 17.9% total return for the S&P 500, and the watch figure is before servicing, insurance and selling costs. A few references have beaten equities over specific periods, but the market as a whole remains well below its 2022 peak.

Can you sell a luxury watch quickly in Dubai?

Yes, if you accept a dealer's price. Dubai has many pre-owned dealers who will make a same-day offer, but that offer includes their margin: even a long-standing client trading in may receive only 80 to 85 cents on the dollar. Selling privately or through an online marketplace usually gets a better price and takes weeks, with more fraud risk.

Do unworn watches always sell for more?

Usually, but not always. A watch with stickers, full set and recent papers tends to command the highest price for its reference, and documented pieces sell for 10% to 30% more than undocumented ones. An unworn example of a model trading below retail still loses money, so condition improves a sale price without fixing weak demand.

Do you pay tax on watch profits in the UAE?

The UAE has no personal capital gains tax, so an individual selling a personal watch at a profit keeps the gain. You will usually have paid 5% VAT when buying, and selling to a buyer abroad can trigger customs duty and VAT in their country. Anyone trading watches as a business should take advice on VAT and corporate tax registration.

The bottom line

Luxury watches can hold value, and a narrow group of Rolex, Patek Philippe and Audemars Piguet references still trades above retail. For most buyers, though, buying and selling costs, servicing, insurance and the absence of income turn a modest price gain into a loss. Buy a watch because you want to wear it, budget for it as a luxury purchase, and keep long-term savings in diversified, regulated investments built to compound.