The luxury watch outperforming stocks in South Africa

As the rand weakens and markets stagnate, South Africans are increasingly investing in luxury watches, jewellery, and handbags as alternative assets that offer stability, liquidity, and returns now rivalling traditional investments.

The eighth annual State of the Luxury Market in Africa 2025 report revealed that these high-end items are increasingly valued for their resale potential and portability.

Reinforcing this trend, the second-hand market is expanding three times faster than the first-hand market, boasting a 10% annual growth rate. “This suggests a calculated flight to safety,” said Luxity co-founder Michael Zahariev.

“It indicates that South Africans are increasingly treating designer pieces like financial instruments – portable assets with global liquidity that can outperform traditional markets.”

Rolex, in particular, has broken every barrier, with pre-owned pieces now commanding 126.5% of retail price, up from 104.9% in 2024 and 82.6% in 2022.

“This 26.5% premium reflects buyers paying for immediate access and bypassing multi-year waitlists,” Zahariev said.

“Rolex has effectively created its own asset class through iron discipline over supply and global demand, completely inverting normal depreciation curves. As long as these fundamentals hold, this isn’t a bubble, it’s a new pricing floor.”

He explained that the brand’s decades-long performance and sophisticated resale infrastructure make it uniquely resilient.

It is less exposed to economic cycles than traditional investments. At the same time, it is capable of delivering comparable or superior returns.

Other timepieces also show strength, with Panerai and Hublot retaining 79.2% and 74.3% of their retail value, respectively.

Overall, high-end jewellery continues to deliver defensive value. Cartier retains 72.6% of retail value, Hermès 67.8% and Bulgari 64.3%.

Handbags are also strengthening their investment credentials, with demand up 14.6% as buyers prioritise resale metrics over runway appeal. Together, these assets are forming a “value floor”, a buffer against downside risk when markets soften.

Rolex beats South Africa’s property market

In September 2025, Zahariev also pointed out that luxury watch investments are emerging as a stronger, lower-barrier investment than South African property.

Rolex has seen its resale values as a share of the original purchase price climb from 87.5% in 2021 to 104.9% in 2024.

“This means they’re not just holding their value but appreciating beyond their original retail price,” Zahariev said. “Meanwhile, your property portfolio is probably losing value faster than you can say ‘bond repayment’.”

Academics are supporting this. A recent Swiss study found that luxury watches carry less risk than most traditional investments and deliver higher returns.

South Africa’s property market is struggling, with house prices increasing by a mere 4.8% between 2019 and 2024. Factoring in inflation, property values actually shrank by 0.59% each year in real terms.

In contrast, trading activity for luxury goods in South Africa has exploded 184% since 2019, with mid-range watches alone surging 28% in the past year, according to the Clur Shopping Index report.

It is important to remember, though, that not all luxury is investment-grade. Searches for shoes fell 10.2% and wallets 21.3% year-on-year as interest shifted towards assets with appreciation potential.

This, Zahariev explained, has cemented watches and jewellery as preferred “hard” luxury investments. South African shoppers are prioritising brands with proven value retention.

Louis Vuitton and Gucci’s combined search share fell from 29.6% to 21.5%, while under-the-radar hard-luxury brands like Bulgari gained 8.6 percentage points.

Buyers are targeting scarcity, durability, and strong resale potential – qualities that do not always align with brand popularity.

“These aren’t vanity purchases anymore,” Zahariev said. “Buyers are running the same due diligence on a Cartier bracelet or Chanel Handbag as they would on a JSE-listed stock, and in some cases, the bracelet is outperforming.”