Diamond Articles

Do Diamonds Appreciate in Value?

June 28, 2019 - Diamond Articles
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Whether you inherited a diamond or are curious about your own diamonds, you might have asked yourself: do diamonds appreciate in value? As one of the leading diamond experts, we are often asked this question by our clients. There is plenty of conflicting information online as to whether diamonds are an investment and if diamonds increase in value over time. Keep reading as our expert gemmologists tackle this popular question and determine if diamonds do in fact appreciate in value.

Get the answers to the following questions:

 

Do diamonds appreciate in value?

The short answer is that most diamonds do not appreciate in value over time. Only an extremely small category of diamonds increase in value, which we will discuss later. There is a widespread misconception that diamonds are rare and become more valuable over time. But the vast majority of diamonds are not an investment as their resale price is lower than their retail price.  In fact, when selling a diamond you can expect to receive 25% to 50% of its retail price. And this price drop for second-hand diamonds can come as a shock.

Do Diamonds Appreciate in Value

So why do diamonds depreciate in value? Just like when you drive a new car off the lot, your diamond dramatically drops in value once you walk out of the jewellery store. This is because there are several players in the diamond’s value chain, not just the jewellery stores that sell the diamond to you.  So while retail prices for diamonds may be high, the resale market rate for diamonds is much lower.

 

Diamond retail value vs insurance value vs resale value

When discussing the value of diamonds, it is important to understand the difference between diamond retail value, insurance value and resale value.

  • Diamond retail value: This is what you paid for the diamond at the jewellery store. According to Business Insider, big box jewellery stores mark up their diamond prices from 100% to 200%. Jewellery stores inflate the prices in order to cover slow moving inventory, operating costs and to create a profit.
  • Diamond insurance value: This is the amount that your diamond is insured for, either provided by the jeweller that you bought the diamond from or a private insurance company. The insurance value is always much higher than what you actually paid for the diamond. This is done for two reasons: to make it seem like you bought your diamond at a bargain price and to up your insurance costs. Ultimately the insurance value of your diamond is not indicative of your stone’s retail value or resale value.
  • Resale value: This is what you can sell your diamond for on the second-hand market. This will not take into account the profit that a jeweller made on the stone.

 

What diamonds appreciate in value?

Truly rare diamonds. Certain rare fancy colored diamonds such as red, blues or pinks of exceptional quality and/or carat weight can increase in value. The same applies to exceptionally rare, high quality, large white diamonds with perfect color, cut and clarity grades. This is because incredibly rare diamonds are in high demand and limited supply, meaning that they will appreciate in value.

Do Diamonds Appreciate in Value

In fact, fancy red diamonds are so rare that only 20 to 30 truly red diamonds are believed to exist. According to the Natural Colour Diamond Association, “prices for natural blue diamonds has been gradually and consistently rising between 12 and 17 percent every year over the past decade.”  But, the profit you make on even the rarest of these diamonds is impacted by where and from whom you buy the diamond (i.e. how much margin are they making on you).

 

How to get the best price when selling a diamond?

Now that you know the realities of a diamond’s value on the second-hand market, we will show you how to get the best price when selling your diamonds:

  • Proper Care: While diamonds are one of the toughest substances in the world, they can chip and fracture. Damaged diamonds will not be as valuable as their undamaged counterparts. If your diamond is set into jewellery such as an engagement ring or necklace, having the entire piece in good condition without major dents or missing diamonds will secure you the best price.
  • Certification: Diamond certificates from a reputable lab, such as the GIA, are an official report of your diamond’s characteristics. They will detail key information on your diamond such as its 4C’s, fluorescence and symmetry. This report will allow potential buyers to provide you with accurate quotes for your diamonds and stronger price offers.
  • Box and Papers: If you bought designer diamond jewellery from a brand such as Tiffany or Cartier, you will likely have received branded box and papers (the brand’s certificate) upon its purchase. These are valuable materials, especially if in good condition, that will increase your offer as they help to illustrate the authenticity of your piece.
  • Sell to the Diamond Experts: When it comes to getting the best price for your diamonds, it pays to work with the experts. At WP Diamonds, we are a leading diamond buyer with a team of experienced GIA trained gemmologists, working with hundreds of customers around the world on a daily basis. Since 2012, our free, professional service has earned us a plethora of excellent reviews from satisfied customers. Thanks to our international presence and industry expertise, we are able to provide strong prices and a quick selling process. Sell online or in person, securely and easily with our streamlined service. Simply click the button below to fill out our online form and receive your price quote.

How can I upgrade my diamonds?

When you sell diamonds, designer jewellery or luxury watches that you no longer love, we can provide you with 10% more on your offer in the form of store credit with one of our jewellery store partners (store prices exclude VAT).

Follow our 5 simple steps to upgrade your diamond:

  1. Complete our online form.
  2. Receive your price quote.
  3. Schedule an appointment at one of our offices in Birmingham, London, New York or Hong Kong. Or request a free Royal Mail Special Delivery Pack that is fully insured, secure and trackable.
  4. Receive your final price
  5. Accept payment by bank transfer OR in store credit for 10% more with our upgrade program.

Author
Bio: Written by one of our diamond, designer jewelry or luxury watch experts. With over 150 years of combined experience, our experts are able to comment on trends, share industry knowledge and provide diamond, designer jewelry and luxury watch education.

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