With every auction season, it feels like there is always a new record being set for a particular vintage reference. Even with more pedestrian models, there can be the impression that the prices are rising to stratospheric levels. I have jokingly referred to it as altitude sickness, where even the most seasoned enthusiast has to adjust their pricing exceptions every six months as the market takes another step up in valuations, understandable when we can see the exact same 18K gold Rolex Daytona with “lemon” Paul Newman dial being sold in 2011 for 165,000 CHF, returning to auction in 2018 and selling for the equivalent of 705,000 CHF.

This is often derided as a bubble, and there is no doubt that some parts of the market resemble Tulip Mania, but this is not a universal truth and the subject is more nuanced. Through conversations with top tier collectors, it is possible to gain some understanding as to what motivates them to spend these huge sums, how they rationalise it, and what this might mean for the very top end of the market going forward; read below for a few key points.

They are compelling objects

Fundamentally this seems to be the core consideration for most buyers. It is easy to overlook the fact that underneath it all, they are nicely made objects that are fun to wear and enjoy and often have a great story behind it. There has been no shortage of column inches that have been written about how a watch is the only item of jewellery a man can really wear, and this is certainly part of the story, but the greatest consideration is that vintage watches are nicely designed, forming the foundations for some of the greatest pieces of industrial design to this day. Overall they are well made, and can often acquire an attractive patina (Your Mileage May Vary on the last point).

They are rather nice to wear

Thanks to the comparatively antiquated and inefficient manufacturing methods used to produce the most desirable vintage watches, they feel very different on the wrist when compared to modern watches. To start with, the majority of older watches are quite a bit smaller, making them more comfortable to wear on thinner wrists, a big factor in Asia where the owners tend to be more slight than Europe and the US, and are quite a bit lighter because of their more compact dimensions. In addition, when they come with a bracelet, they are often made with hollow rather than solid links so do not weigh the wrist down. In addition, the highly legible, unfussy dials with high contrast designs make time telling very easy, a somewhat underrated point when it comes to the overall ownership experience.

They are a relatively rare, and more importantly, finite resource

While rarity does not directly equate to value, it does have some impact of course, and the production numbers for even the most common vintage references pales in comparison to modern limited edition pieces. Then take out all of the ones that have been lost in action or had vital parts replaced during servicing, and the number gets even smaller. While there have been both official reissues, such as the Omega Speedmaster 60th Anniversary Limited Edition, and unofficial homages, like the Gervil Tribeca as well as the plethora of fake Paul Newman Daytonas that have found their way into the market in recent years, they certainly don’t offer the same experience as something all original and correct, with traceable history and a few decades of wear and tear. Which leads us nicely on to…

It is a golden period for great watches with strong provenance

It is a well known fact that a Paul Newman Daytona is not a rare thing relatively speaking, as can be seen by the multiple examples that appear at auction each season. But to find one in truly great condition (unpolished, all luminous plots in place, no scratches to the dial, correct bezel and bracelet etc.) with continuous history – that can be confirmed – is extremely challenging. On top of this, there is a new breed of enthusiast that will spend hours poring over books and websites learning every nuance, and can more easily spot imperfections or inaccuracies in a watch’s condition or representation. Such things as the wrong dial in the wrong case number range were not a concern to the previous generation of collectors, but they now have a huge impact on value, and there is an army of armchair experts on Instagram ready to highlight all issues, big and small.

They are an asset class and have appreciated strongly

Of course it is hard to ignore the fact that some people see watches as a great investment, an inevitable when so much attention is drawn to the rise in prices. The good news is that most who try and treat it as a raw commodity trade with no passion for the object, generally get burnt buying either something fake, put together, or in extremely poor condition, so exit the market quickly. What we are left with is the “specollector” (a term so eloquently coined by Simon Kidston): someone who started out as a passionate enthusiast, saw the opportunity to make some money and is now treading the thin line of becoming a dealer due to the frequency with which they trade. This still represents a small percentage of the buyers, but it is hard to not give some attention these individuals and the psychology that drives them, as some of the logic which they appeal seeps into the mind of even the most hardened “buy what you like” collector.

A new generation values the experience economy and owning history

As the average age of buyers drop, we have seen their increasing interest in watches, not for their rarity, but for what the model represents from an anthropological perspective, as they can provide a degree of escapism to those leading a desk-borne existence, imagining great acts of bravery by the likes of Edmond Hillary, the Apollo 11 astronauts and Jacques Cousteau. This is most noticeable in sports model Rolex, with British military issued Submariners, Tudor snowflakes equipped by the French Marine National, the GMT-Master supplied to Pan Am pilots, and of course Daytona references thanks to their association with Paul Newman, all being increasingly coveted by a younger generation of collectors. This has also filtered into other models such as the Omega Speedmaster and the Heuer Autavia, but the buyer bases in these parts of the market are much shallower, making it hard to form a clean opinion when pricing is so volatile.

Move toward casual wear

Related to the above and the youthful demographic attracted to vintage watches, is the rise of streetwear as a more acceptable mode of dress, causing the demise of more formal attire. With brands such as Supreme, Vetements, and Virgil Abloh’s Off White blowing up, together with more obscure labels like A Cold Wall and Palace collaborating with the titans of Nike and Adidas respectively, it is clear that the days of Brioni suits, Kiton shirts and Lobb shoes are behind us (at least for now). So what better to pair with your thousand dollar plus Moonrock Yeezys? A vintage stainless steel sports watch of course, much more in keeping with the overall look than some gaudy, oversized modern piece in precious metal, and the perfect extension of the “insider knowledge” required to keep up with the latest niche brands (“Oh you don’t recognise it’s a mark 1, patent pending, thin case double red on its original 7835 bracelet with prototype clasp? Pssh”).

There is a lot of cash, especially in Asia

While other parts of the world may be feeling the pinch economically, especially the old money in Europe, there is one place not suffering to the same extent: Asia. Whether it be China, South East Asia, Japan, Taiwan or the SARs of Hong Kong and Macau, the last decade of economic prosperity has been very kind to those in a position to take advantage of it. This has resulted in increased liquidity to acquire collectibles, and while space is at such a premium that maintaining an extensive art or car collections is extremely challenge (aside from the fact that the climate is hostile to storing these sorts of things), smaller object such as watches and jewellery are not only easier to store but do not have the maintenance, restoration or logistically issues of larger object, and can be enjoyed while travelling internationally. All of this has culminated in Asia buyers reputedly providing somewhere between 50 and 70% of the revenue across the major houses for their Geneva auctions this past season.

They are extremely stealthy

Perhaps connected to the previous point, they are not nearly as shiny and in-your-face as newer watches. Whether it is due to more subdued surfaces following decades of wear, or the preference for brushed versus polished case finishing, coupled with smaller case sizes, vintage watches are much easier to slip under a cuff and attract far less attention than their modern counterparts. This is rather important when you want to want to enjoy a six or seven figure watch regularly, but still fly under the radar.

They conveniently project status on social media

After every major auction, for those following the watch collecting and trading personalities on Instagram, there will be a stream of wrist shots of the various top lots as they had their fleeting moment with them during the previews. The power of social media has allowed these watch to encapsulate a degree of taste, sophistication and, of course, wealth, that others aspire to, drawing more into the vintage watch world. And even if it isn’t at the multi-million Swiss Franc level of a Patek Philippe reference 1518 in steel, there have been no shortage of stories where has acquired a piece simply to be able to post on their feed and tag the major accounts to gain their “influencer” status.

The number of buyers outweighs the volume of willing sellers

Much of the rise can be distilled into the simple market dynamic of supply and demand: there are far fewer genuinely good condition vintage watches with clear provenance (something that will become increasingly important going forward) that are available in the market, than there are highly motivated buyers with the discretionary spending budget available. On top of that, the very best “blue chip” watches are residing in collections where there is no motivation to sell, making them even more difficult to acquire. These watches can now have their valuation benchmarked far more transparently than could be achieved historically thanks to modern data processing, such that they have to be included as part of a more traditional investment portfolio.

It brings a sense of community 

Historically, when someone was looking for a sense of belonging, they would join a “friendly society”, but today with the rise of social media and the lack of close relationships, this can be hard to come by. In the vintage watch world there has always been sites such as Vintage Rolex Forum, and today with modern messaging apps, there is no shortage of private WhatsApp groups around watches, where people can share their timepieces and feel a sense of belonging. This manifests in person at the auction sale rooms internationally, and at events such as the Vintage Rolex Asylum gathering in Indonesia and the Issued get together that takes place in the UK, where a real sense of camaraderie can be felt.