Diamonds are associated with love, milestones, and long-term value. However, in terms of resale value, lab-grown and natural diamonds fare quite differently in the market.
Lab-grown diamonds have gained growing popularity over the past several years as they provide the same physical beauty as natural diamonds at a significantly lower price. While natural diamonds continue to be preferred amongst many buyers due to their rarity, extended demand in the market, and high resale value, particularly when people buy through reputable natural diamond jewelry stores.
So, do lab-grown diamonds actually hold value? And are natural diamonds really a better investment?
Here’s what buyers should know before making a decision.
Key Takeaways
-
Natural Diamonds: A better choice if you're looking for sustainability and a long-term asset, especially for higher-quality stones.
-
Lab-Grown Diamonds: Ideal for people seeking affordability but less appealing for durability and resale value.
- Surprisingly, losing 100% on a lab diamond might cost you less than losing 60-80% on a natural diamond of similar quality.
-
Many buyers choose lab-grown diamonds for affordability rather than resale potential.
Do Natural Diamonds Hold Their Value Better?
Natural diamonds have more resale value as they are rare, and are naturally formed through millions of years, and are backed by a resale market that is well established.
The average natural diamond is resold at approximately 20-60% of the original retail price, based on such criteria as carat weight, cut grade, color grade, clarity, certification, brand recognition, and market demand.
Natural diamonds also benefit from:
- Stronger historical demand
- Auction and collector markets
- Luxury and heirloom perception
- Limited geological supply
- Greater buyer confidence in resale markets
The certified diamonds with reputable laboratories such as the Gemological Institute of America (GIA) usually sell better on resale due to the confidence placed in the grading and authenticity.
Still, one should understand that the number of natural diamonds is not growing as a financial investments. The retail markups, production expenses, and market swings imply that most diamonds will have lost their value after purchase.
Do Lab-Grown Diamonds Have Resale Value?
Lab-grown diamonds do have resale value, but it is usually very low in comparison to natural diamonds.
In most cases, lab-grown diamonds resell for around 10%–30% of their original retail price. Due to the scalability in the production of these diamonds, prices have continued to fall as producing technology advances and the supply of diamonds increases.
It does not imply that lab-grown diamonds are imitated or of inferior quality. They are genuine diamonds, and their chemical composition and strength are similar to natural diamonds. Nevertheless, the resale market is understated, and the demand of buyers to purchase second-hand lab-grown stones is lower than that of natural diamonds.
Many consumers still choose lab-grown diamonds because they offer:
- Larger carat sizes for the budget
- Lower upfront cost
- Ethical sourcing appeal
- Modern buying flexibility
- Visually identical appearance to natural diamonds
For buyers focused on beauty and value at the time of purchase, lab-grown diamonds can still be an excellent option.
Lab-Grown vs. Natural Diamond Resale Value Comparison
| Factor | Natural Diamonds |
Lab-Grown Diamonds |
| Initial Cost |
Higher | 30%–70% lower |
|
Typical Resale Value |
20%–60% | 10%–30% |
|
Long-Term Demand |
Established secondary market | Still developing |
| Supply | Naturally limited | Can be produced at scale |
| Price Stability | More stable historically | Prices continue to decline |
| Investment Potential |
Moderate for rare stones |
Generally low |
| Buyer Motivation |
Tradition, rarity, heirloom appeal |
Affordability and value |
Factors Affecting Diamond Resale Value
- Quality Matters (The 4 Cs): The resale value of a diamond is influenced by its carat weight, cut, color, and clarity. Diamonds closer to colorless (D to F range) and have fewer inclusions or blemishes (higher clarity grades like FL or IF) are more valuable.
- Fashion Trends: Economic Conditions: Consumer preferences and jewelry trends influence the resale value of diamonds, with popular styles having the highest potential. We've also observed a decline in sales of luxury items due to the economic downturn.
- Rarity & Supply: Diamonds with rare colors like pink, blue, or green have a higher resale value due to their scarcity and popularity among collectors. Natural diamonds cannot be produced in large quantities and thus are considered more valuable in the secondary market. This scarcity-based attraction is also observed in certain rare gemstones in the world, where scarcity and exclusivity play a great role in determining the long-term desirability.
- Certification & Brand: Certified diamonds from trusted organizations such as the Gemological Institute of America or American Gem Society tend to have stronger resale potential because buyers can verify quality and authenticity.
What About Trade-In Value?
The trade-in value does not equate to resale value. There are jewelry stores that have upgrade programs where you get store credit on a more expensive purchase. As an example, a jeweler can give you a trade-in credit of, say, $10,000 on your current ring, but will insist that you spend at least $20,000 or more on a new one.
Although such programs may still offer the value of upgrading jewelry, they must not be mistaken for direct resale returns.
Should You Really Care About Resale Value?
Caring about a diamond's resale value depends on your priorities. If you value long-term rarity, stronger resale demand, or the idea of passing a diamond down as a family heirloom, a natural diamond may be the better choice. Natural diamonds have a long-established secondary market and are generally viewed as more desirable in resale and collector spaces.
On the other hand, if your priority is maximizing size, quality, and visual impact within your budget, lab-grown diamonds can offer exceptional upfront value. Many modern buyers prefer lab-grown diamonds because they can purchase a larger or higher-quality stone for significantly less money while still getting a real diamond with the same brilliance and durability.
Expert Opinion: A diamond is rather a luxury than an investment. Although there are rare natural diamonds that retain value, most diamonds lose their value once bought because of retail markups and market dynamics. In the majority of situations, buyers are expected to put more emphasis on personal meaning, beauty, and long-term enjoyment than on anticipating high resale returns.
