Quote:
Originally Posted by GreenLantern
I don't think it has anything to do with that.
Simply, the pandemic caused a roughly 25% reduction in production for 2020 (at least, AP is at minus 25%, and I have to presume so are Patek and Rolex).
This reduced production reduces an already constrained supply. Hence the madness we see right now.
If there's extremely long term unemployment and negative economic forces, obviously demand will drop. But it's too short of a period right now to have that significant of an effect to outweigh the further reduction in supply.
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I think when bonuses start falling flat in February-April, things will start to slow. The industry was kept afloat by a lot of opportunistic purchasers over the initial wave, as prices dropped and people still had ample money. The second factor will change as GDPs regress over the coming years and thus the prices may slide. But the fact of the matter remains that AP and Patek will likely be the last to be affected. They can reduce their hot steel models to almost zero and continue to operate (Patek more so than AP). I could see Rolex prices losing ground first, as less people find themselves in a position to pay gray prices.