Do Lab Grown Diamonds Hold Value?

What has happened to lab-grown prices

A lab-grown diamond is diamond. It has the same chemistry, the same crystal structure and the same hardness as a mined one, and it is grown in a controlled process rather than formed underground. The way it is made is the reason its price has behaved differently from a mined stone’s.

When a mined diamond is scarce, geology sets the scarcity. When a lab-grown diamond is scarce, the scarcity is set by how many growers have installed equipment and how hard they choose to run it.

Over the last several years more growers have entered the market and existing ones have expanded. The wholesale price per carat of a lab-grown diamond has come down as a result. Retail prices have followed, though not evenly, because a retailer’s price also carries a share of everything that surrounds the stone, from the setting to the service.

This page gives no price figure, on purpose. Prices for these stones move, and a number printed on a page goes stale faster than the page does. The direction is the part that can be observed. For the same size and quality, a new lab-grown stone has generally cost less than it used to.

Nobody can tell you where the price goes from here, and this page will not guess. It may keep falling, it may level off, or it may do something no one has predicted. What can be said is that the trend so far is what a buyer of a used stone is competing against.

Why the resale market for lab-grown stones is thin

Resale means selling a stone to someone who is not the retailer, or back to a retailer or dealer who then has to sell it on. Either way the price is set by what the next buyer will pay, and the next buyer has a choice. A new lab-grown stone, priced at today’s level, is sitting in a case beside your used one.

As new stones get cheaper, the used stone has to be priced below them to attract anyone. That pressure is what makes the secondhand market hard for a stone whose new price keeps moving.

The market is also small. Mined diamonds have been traded for a long time, and there are dealers, buyers and auction houses whose business is buying them secondhand. The market for used lab-grown stones is much younger, with far fewer buyers set up to price and buy them.

A seller may find a few offers or none, and the offers can sit far apart. Thin is the honest word. There are not many participants, so there is no reliable going rate to point at.

None of this is a comment on the stone. A used lab-grown diamond can be as beautiful and as durable as the day it was bought. The difficulty is only in turning it back into money at a price you can predict.

Resale of any piece of jewelry, natural stones included, generally lands below the retail price, because a retail price includes costs of retailing that a buyer of a used piece does not want to pay for again. So the question for a lab-grown diamond is one of degree and of predictability, and this page does not put a number on either. Our natural diamonds page covers the mined side of that comparison.

What a buyer of a used stone looks at

A buyer weighing a used lab-grown diamond compares it with what is new. They look at size, color, clarity and cut, the same properties a new buyer checks. They look at whether a grading report comes with the stone and whether the report matches it.

They look at condition, since wear on the stone or on its setting lowers what they will offer. And they look at how the stone compares in price with a new one of the same specification, which is where falling prices bite hardest.

A stone in an unusual size, or one with no report, has fewer possible buyers still. That is worth knowing at the time of purchase rather than at the time of sale. It costs nothing to ask, when you buy, what a future buyer would be able to see and check.

Trade-in terms are not resale value

People often read a jeweler’s trade-in or upgrade terms as an answer to the resale question. The two are related, but they are not the same thing. Resale is a price that a buyer sets in a market.

A trade-in term is a rule that a jeweler sets about its own business. It describes what the jeweler will do when you come back to buy from them again. It says nothing about what any other buyer would pay, and it cannot, because a jeweler does not control the market.

Here is our own position, in the words we use everywhere on this site. Price match & 100% diamond trade-up. Your diamond's full purchase price credits toward an upgrade of at least 1.5x its original value.

Read that as what it is: a statement about a purchase made with us. It is not a promise about the market, and it is not a guarantee of what a stone will be worth on any given day. The detail above describes a credit toward an upgrade.

A sale on the open market pays out money. Those are different things, and neither can stand in for the other. If you are weighing a specific stone, ask in the showroom how those terms read for it, and get the answer before you buy rather than after.

What you are buying a lab-grown stone for

Jewelry is bought to be worn, given and kept. It is not an investment product, and this page does not treat a diamond of either origin as one. It does not say whether a lab-grown diamond is a good or a bad investment, because it does not regard any diamond as an investment to begin with.

A cleaner way to frame the purchase is by what it does for you now. A lab-grown stone gives you a diamond of a chosen size, color and clarity, usually for less than a mined stone of the same specification. Many buyers put the difference into a larger stone, a better setting or another piece. Those are choices about what to wear, not about what to sell later.

If you are buying to keep, wear and hand down, the resale question matters less, because you may never test it. If you can imagine selling the stone within a few years, weigh the points above honestly before you commit, and remember that no jeweler can tell you the figure in advance. You can see the stones and how they compare with mined ones on our lab-grown diamonds page. If you are buying for size and look rather than resale, loose lab diamonds let you pick the exact stone first.

Questions to ask before you buy

These work with any jeweler, including us, and they work whichever way the stone was made.

• Is this stone for wearing and keeping, or do I expect to sell it? If you expect to sell, decide now what you would accept if the answer were disappointing.
• What does the grading report say? A report gives another buyer something to read, which makes a stone easier to describe when the time comes.
• What are the trade-in or upgrade terms, and which stones do they cover? Ask every jeweler you compare, and ask before you buy.
• Would I still be glad to own it if its price were lower next year? A stone you would happily keep is not affected by a falling price.
• What would replacing the piece cost if it were lost or damaged? Insurance value and resale value are different figures, and a stone can have very different amounts under each.

If you are still weighing a lab-grown stone against a mined one, our diamond buying guide explains how both are graded, and our guide to whether a lab-grown diamond suits what you want takes the wider view. To see the stones in person, you can book a consultation.