Diary of a Patek Philippe collector – auction buzz: hot or not? (27th June 2020)

The long-awaited Phillips Geneva auction saw its first half completed on Saturday 27th. Ahead of the second half of the Auction XI on Sunday, some general observations are worth making regarding what happened in the first session.

There is no question at all in my mind that a lot of people will focus on the Phillips auction as a bellwether for the health of the watch market. Covid-19 hit hard at a time when many hot watches had already started to weaken. According to my numbers, by 2020 q1, many of the so-called “hot” watches were selling 20-30% below their 2019 peak. What effect would the Covid lockdown have on watch prices?

I will discuss what happened with Patek Philippe. Around 25 Patek Philippe watches were sold in the first session. Just over half of these sold at or above the upper end of the estimate. When it comes to Nautilus, the tendency was even more pronounced for prices to clip at or above the upper estimate.

Another key observation is that watches that did especially well were ones that had both the element of rarity combined with excellent condition. I think it has become almost a truism that watches that are both rare and in excellent condition receive an added premium at auction. This has certainly been the case in recent years. The fact is, this theme continued at the Phillips Geneva auction. I will mention three watches that typify this theme.

The 3417A was a second series example in lovely condition with the added twist of having the Gubelin signature. It had an estimate of CHF 30-50k. It sold for CHF 115k at hammer. The buyer will need to pay a 25% commission on top of that.

The Ref. 3417A is becoming more and more iconic. This particular example being especially rare and in excellent condition.

(Picture credit: Phillips)

Now, it is a theme with many auction houses that they put in artificially low estimates in order to encourage buyers to get involved in the hope that a bidding war takes place. I think the estimate of CHF 30-50k was too low. The new owner of this watch paid a total of CHF 143,750. I am not sure if that is a record for a Ref. 3417A or not, but it certainly is a very strong price. However, I will say that the new owner has bought an icon. The 3417A is, for many, Patek Philippe’s first real production tool watch. It has both rarity and exclusivity. And this particular one also has excellent condition and a Gubelin signature. It is a very fine wristwatch.

The Ref. 3448G that sold a few lots later had an estimate of CHF 200-300k. It sold for hammer of CHF 515k, and with the commission a total to the new owner of CHF 644k. This watch came from the family of the original owner. It is always hard to be definitive, but it is believed that only around 100 of Ref. 3448G were made. So this watch certainly has some rarity. The dial on this watch is in absolutely excellent condition with raised enamel script. The hallmarking on the case remains crisp though one could say that evidence of some polishing during its 50 year life is clear on the case. Even so, when a watch comes to market that is both rare and in good condition, the price will fly. It flew.

There are probably around just 100 Ref. 3448G on the planet. And when one comes in excellent condition, then of course it flies.

(Picture credit: Phillips)

Perhaps the star of the show was the lot that followed – the Ref.1518R. The estimate was CHF 1.2-2.4m. It sold for CHF 2.7m, and a total to the new owner of CHF 3.4m. It is believed that only 281 watches were made in this reference. Just 13 with pink dials. And this one had the added twist of having unique styled hands. Its history can be traced to its original owner. And its condition marks it as one of the finest 1518s to have come to auction. Is it a surprise that this sold through the upper end of the estimate?

One of the rarest watches on the planet. Historically important. And in stunning condition.

(Picture credit: Phillips)

All the Patek Philippe watches on offer sold. Most sold at or above the high estimate. For the combination of highest rarity/condition, prices were extremely strong. Many will look at this auction and consider the watch market to be in rude health. Indeed, many will think that the bull market in watches is set to march on from here. It will be very interesting to see how the second half of the auction fares on Sunday. I suspect it will continue to show strong. Buyers will be encouraged by the strength displayed today.

Ahead of the Covid-19 outbreak, I was on record as suggesting that the prices of many “hot” watches had started to fall quite sharply. Although it is still early days, and one should always be somewhat cautious of auction results given the power and influence that dealers have in shaping the outcome, the first half of the Phillips auction suggests that for Patek Philippe, the market for rare watches in fine condition is, at a minimum, resilient. One could easily argue that this was a strong auction for Patek Philippe.

I think truly rare watches in great condition will always tend to find a decent bid. However, I will say that hyped watches that are actually in considerable supply will need more than a good auction to convince me that the same trends that were in place in 2019 will continue in 2020.

Lets see.