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The Resale Value of Lab-grown Diamonds

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Lab diamonds resale value is not the same as real diamonds. Lab diamonds are chemically & physically similar to natural ones but have a different value.

Lab-grown diamonds are also real diamonds, but are grown in the lab by scientists. Scientists in a lab recreate the exact processes used to form natural diamonds. Lab-grown diamonds are similar to natural ones chemically, optically, and physically. In almost every case, they can hardly be differentiated from natural diamonds.  

Generally, diamonds are not suitable investments. They are priced using an internationally accepted pricing system known as the Rapaport pricing method. Wholesale and retail prices are based on this particular method. 

Most diamonds, especially those in jewellery, drop in value the moment they are bought. However, unlike lab-grown diamonds, natural diamonds can slowly regain their value over time. As expected, lab-grown diamonds are cheaper than Natural diamonds, and the price has continuously dropped over the past few years. This trend might continue this way, and that would only lead to a further deduction in the lab diamond resale value.  

 

Lab-grown Diamonds vs Natural Diamonds 

Lab-grown diamonds, also referred to as synthetic diamonds, are produced through a controlled technological process. They are made with the same materials as natural diamonds and also share the chemical and physical properties. However, they are not formed courtesy of nature, but are made in the lab either through a process called Chemical Vapor Disposition (CVD) or through another method called High-pressure High-heat (HPHT). 

Lab diamond resale value

 

On the other hand, natural diamonds are acquired through geological processes and obtained by mining because they are formed far beneath the earth’s surface. It requires billions of years of intense heat and pressure, which causes the element carbon to rearrange on an atomic level, which later takes on a diamond’s solid form. The following is an in-depth look at differentiating both diamonds. 

  • Components 

Although Lab-grown diamonds share the same elements and are as authentic as natural diamonds, they are different in other areas that cannot be physically seen. Natural diamonds have a small amount of nitrogen in them, while Lab-grown diamonds do not have nitrogen in them. Also, many Lab-grown diamonds have an inscription that identifies them as Lab-grown. These identifications can only be seen with magnifying glasses. 

 

  • Creation Process 

While natural diamonds are created beneath the earth’s surface, they are made from carbon and created over a very long period, under the natural condition of high temperature and pressure, after which they are mined, cut, and polished. Lab-grown diamonds undergo these same processes, except they are done in the lab and take a shorter period than natural diamonds. 

 

  • Prices

Lab-grown diamonds are lower in the market compared to natural diamonds. Most times, Lab-grown diamonds are 75% lesser than Natural diamonds in price. This is because Lab-grown diamonds cost lesser to make and have a shorter supply chain than Natural diamonds. The natural diamonds usually incur a huge cost to mine and pass through many hands before reaching the consumer. The scarcity of natural diamonds also causes it compared to Lab-grown diamonds. 

 

  • Resale Value 

The Lab diamond resale value also differs from those naturally made. Natural diamonds retail at about 50% of their purchase price. Natural diamonds that are large, colorless, and have no visible inclusions can hold more of their value over time. 

Lab-grown diamonds, on the other hand, are almost impossible to sell after their purchase.  

 

Why Do Lab-grown Diamonds Have No Resale Value? 

Generally, diamonds have low resale value. Like normal diamonds, the prices are first generated based on the 4Cs of diamonds, which include; carat, clarity, colour, and cut. After that, the factor of whether they are lab-grown or natural will be considered. 

lab vs natural diamond revalue

 

However, the lab diamond resale value is worse since it is basically inexistent. The price of lab-grown diamonds would go down significantly compared to its initial price. The resale value of a Lab-created diamond is around 30% to 40% less than a natural diamond. 

Buying Lab-grown diamonds to sell later is not a good investment. It is unlikely for a jeweller to buy a Lab-grown diamond at a high rate when he could easily purchase a similar or better one from another supplier for a much lower rate. Here a 3 reasons that impact the value of lab grown diamonds. 

  • Rarity: Lab-grown diamonds have grown in popularity. They are manufactured in the lab within a short period and are produced in large quantities. Thus, they have no supply constraint or rareness value. They are not one of a kind, as there are several types of that same diamond in the market. This causes their value to depreciate. Compared to natural diamonds that take billions of years to form and a lot of resources to mine them. It is rare to find natural diamonds of large and good quality. It takes about 200- 250 tons of earth for natural diamonds to be mined for a single carat.  

 

  • Technology: Lab-grown diamonds are new to the jewellery market and do not have a long-term value yet. Compared to natural diamonds, lab grown diamonds are more sustainable and environmentally friendly. As technology continues to improve, advancements in Lab-grown diamonds could lower the value of previously sold Lab-grown diamonds. This creates an uncertainty about Lab-grown diamonds which may reduce their resale value in the future. Also, research shows that the major reason for the regular deduction in the value of lab-grown diamonds is manufacturing expenses. Thus, prices of lab-grown diamonds will continue to fall as technology become less expensive.  

 

  • Historical Value: Lab diamond resale value is so low because they have no historical value compared to natural diamonds. Nnatural diamonds have lasted for decades passing through generations, relationships, and love stories as engagement rings and other types of jewellery. Consumers interested in antique, estate, or vintage jewellery pieces prefer natural stones. Each vintage piece of jewellery has its unique look from its respective era which cannot be reproduced by present-day Jewelers. 

 

Conclusion  

Lab-grown diamonds should not be purchased with the aim of making returns on them, as they are not investment items; instead, they should be considered an exquisite token of everlasting love and gifts that can pass through generations. While they may not gain resale value, they still build a lot of sentimental value. 

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