The boom in prices for the hottest steel sports watches from Rolex, Patek Philippe is starting to unwind, according to Philipp Man, co-founder of secondary market specialist Chronext.

The company has been trading in new and pre-owned luxury watches since 2013 and now employs a team of 180 people at its Cologne, Germany, headquarters where every watch it sells is authenticated, polished and refurbished if necessary before being dispatched to customers. It is opening a service center in Toronto, Canada, this year to serve the North American market.

The business began life more as a data-driven trading platform tracking luxury watch prices on the secondary market, and is a treasure trove of data on how every reference launched by the major watchmakers has been performing over the past six years.

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On a visit to the company yesterday, WatchPro asked whether the 2018 spike in prices for the hottest steel sports models was an anomaly, whether it would continue into 2019, or whether recent cooling of prices would continue.

2018 was unique, Mr Man suggested, because normally only a tiny number of watches sell on the secondary market at above retail prices. Last year Rolex, Patek Philippe and Audemars all had several references selling at over retail.

“Selling at prices above retail is happening more now,” he suggests. “When we started in 2012, the retail price of a 11650 Daytona at the time in steel was £7950 at retail but was sold on the secondary market for £9000 ; it has always been above retail, just not as extreme as today. The Nautilus started being sold at or slightly above retail in 2014. Now we are seeing Black and Blue, Skydweller, Pepsi, Hulk, all selling above retail. That is pretty recent, I would say about the last 16 months,” he adds.

It could be the pre-Basel first quarter effect, but Chronext is currently seeing prices fall.

“If I look at the Pepsi, which I sell every day on Chronext, it does not make sense that it sells above retail as extremely, and I can tell you that the premium above retail, the delta, is decreasing pretty fast. It is still quite significantly above retail, but you can see that gap is going to change pretty quickly. Even though it will remain trading at a premium. You can see a number of watches that were going for crazy prices but are now dropping back towards normal retail. One of those is the 5524G, the blue [Calatrava] Travel Time Pilot from Patek Philippe. When that watch first came out, it was selling for €65,000 on the secondary market. Now it is selling for €40,000; that is a 30% drop in market value and back at around retail value. There has been craziness in the market, and you can see the peaks in prices, but they are decreasing more and more.,” Mr Man describes.