Thanks to the wonders of science, not all diamonds come from a mine. These days, plenty of diamonds are created in laboratory settings. Lab-grown diamonds have been around since the 1950s, but their popularity has skyrocketed of late–especially among younger consumers. According to a survey by MVEye, 70% of millennials said they’d consider a lab-grown diamond for an engagement ring stone.
Despite the growing demand, questions still swirl around lab-grown diamonds: Are they real diamonds? How well do they hold their value over time? Do they have any resale value? Keep reading to get the answers you need.
What Are Lab-Grown Diamonds?
A lab-grown diamond, sometimes referred to as a lab-created, synthetic, man-made, or cultured diamond, is a diamond that is manufactured in a highly controlled laboratory setting. Lab-grown diamonds are produced with cutting-edge technology that mimics the conditions inside the Earth’s crust. One of two methods is employed: high pressure, high temperature (HPHT), and chemical vapor deposition. Once the diamond is grown, it is faceted and polished by a skilled diamond cutter to be set in a piece of jewelry.
Are Lab-Grown-Diamonds Real Diamonds?
Lab-grown diamonds are chemically, physically, and visually identical to mined diamonds. Both are made of tightly packed carbon atoms and, when cut and polished, display the same sparkle and fire.
The only difference? One is grown in a lab, and the other comes from nature. Think of it this way: lab-grown diamonds are like roses in a greenhouse, while mined diamonds are like roses in a garden. Even though their origins are different, they’re definitely both roses.
What Determines the Value of a Lab-Grown Diamond?
Typically, any diamond that weighs 0.15 carats or more and is in the D-Z color range, should come with a grading report from a reputable gemological laboratory. The grading report assesses the diamond’s quality according to the Four Cs (cut, color, clarity, and carat weight) and also denotes the origin (laboratory vs. mine) and growth method (CVD or HPHT). The data in a grading report helps a diamond seller quote a price for the stone and verifies all the diamond specs for the consumer so that they know exactly what they’re buying.
As with natural diamonds, lab-grown diamonds with high cut, color, and clarity grades will command top prices. One differentiating factor between natural and lab-grown diamonds is that the latter is more affordable: Carat-for-carat, they typically cost 20% to 30% less than mined diamonds (and sometimes as much as 40 to 50% less).
There are a couple of reasons why: Lab-grown diamonds are more cost-effective to produce because they touch fewer hands in the mining process; as such, the mine-to-market supply chain is shorter. Also, lab-grown diamond suppliers are competing with mined diamonds—and each other—so lower prices naturally enhance their product’s value proposition.
Do Lab-Grown Diamonds Hold Their Value?
Lab-grown diamonds are far from worthless in terms of their durability. Because they are carbon-based, they are ultra-resistant to scratch and wear. And with proper care, lab-grown diamonds will sparkle for years to come. However, lab-grown diamonds typically do not appreciate over time.
The technology of lab-grown diamonds is still evolving which could lead to changes in how they are valued and priced. If they become easier and cheaper to produce, their price will likely go down. This also means that the price you pay for a lab-grown stone today could decrease significantly even a year or two from now. In other words, if you buy a man-made diamond today, it will likely cost less next year as more growers enter the marketplace.
Do Lab Grown Diamonds Have Resale Value?
Most consumers who opt for lab-grown diamonds are likely not thinking about their purchase as a financial investment that will hold its monetary value over time. Their goal: to possibly save money or get the biggest bang for their buck. And anyway, most people buy a diamond for sentimental reasons—the intention is to wear it forever, not liquidate it for cash one day down the road.
Based on simple economics, everything has a resale value if there is a market for it. Right now, the resale market for lab-grown diamonds is not well-defined and ever-evolving. Given the steady demand for lab-grown diamonds, there should be some resale value. But typically, you won’t get close to what you paid for it.
Whatever type of diamond you decide on, make sure you get it insured by a reputable company like Jewelers Mutual. Obtaining personal jewelry insurance through Jewelers Mutual is an affordable option and covers loss, damage, and mysterious disappearances. You can receive a jewelry insurance quote in just 30 seconds by clicking the button below.
