What you need to know before you buy lab-grown versus natural diamonds

The slogan of "a diamond is forever" — linking diamonds to everlasting love and ultimate commitment — has been instilled for decades.

Diamonds are generally considered a luxury asset that holds its value, but the emergence of laboratory-grown diamonds in the jewellery industry over recent years could challenge that belief.

Are synthetic diamonds real diamonds, and what do you need to know before making a purchase?

Let's break it down.

Are laboratory-grown diamonds actually diamonds?

Yes, lab-grown diamonds, also known as synthetic diamonds or man-made diamonds, have identical chemical, physical and optical properties to their natural counterparts.

Despite their near-identical appearance, trained gemologists and sophisticated equipment can still detect subtle differences.

Natural diamonds, or mined diamonds, are extremely rare compared to other minerals, according to Geoscience Australia.

They form at depths of 150 to 200 kilometres below the Earth's surface where high temperatures and pressures allow them to crystallise.

Then the diamonds may be picked up by hot magma and transported upwards as the magma intrudes into the Earth's crust.

Most natural diamonds are between 1 and 3 billion years old.

According to Macquarie University, the two main methods for growing synthetic diamonds today are the high-pressure, high-temperature (HPHT) method and chemical vapour deposition (CVD).

HPHT mimics Earth's conditions to create diamonds, while CVD grows them atom-by-atom in a vacuum chamber by exposing a diamond seed to carbon-rich gases.

How do lab-grown diamonds compare to natural ones financially?

From a quality perspective, synthetic diamonds benefit from highly controlled production environments, resulting in a consistently strong cut, colour and clarity, the Jewellers Association of Australia (JAA) has told the ABC.

"Yet one of their most significant drawbacks is their negligible resale value," a spokesperson from the JAA said.

"On the other hand, because synthetic diamonds are substantially cheaper than natural stones, the overall financial loss to consumers can be lower."

The spokesperson noted that many buyers preferred natural diamonds for their geological rarity and the long-standing heritage of mined gemstones.

In general, lab-grown diamonds are 30-70 per cent cheaper than natural ones per carat.

The price of lab-grown diamonds was expected to drop further as production capacity increases, the JAA said.

Therefore, synthetic diamonds should not be considered investment stones and must be marketed accordingly, and retailers' clear disclosure remains paramount, the association said.

Do lab-grown diamonds have a future in Australia?

Experts say yes, with younger consumers being the main driving force.

Millennials and gen Z would drive virtually all luxury market growth going forward, said Marty Hurwitz, a co-founder of the Global Diamond Trade Organisation (GDTO).

"These buyers prize sustainability, transparency, and digital fluency — values that are already reshaping every corner of discretionary spending," Mr Hurwitz said.

"Our research estimates show the current retail market share between 50-60 per cent in favour of lab-grown diamonds in Australia."

He said it could reach as much as 70 per cent by the end of 2026.

Synthetic diamonds were also increasingly used in watchmaking and other design applications, the JAA noted.

The association added that sustainability and responsible sourcing were also influencing purchasing decisions in younger Australians.

However, the JAA said it was important to recognise that natural diamond mining supported local employment and communities in several developing nations.

Historically, so-called "blood diamonds" or "conflict diamonds" had been used to help fund armed conflicts, particularly in Africa.

Over the past couple of decades however there has been a concerted international effort to reduce trade in stones of dubious origin.

What do jewellers think?

Justin Linney, the creative director of Linneys, a natural diamond jeweller, has criticised some lab-grown diamond retailers for leveraging "market confusion" and providing "misleading information".

"The growth in synthetic diamond factories has been driven largely by the misleading marketing term 'lab-grown diamonds', when in reality these are synthetic by definition," he said.

"For some consumers who thought they were purchasing a more environmentally friendly option they are now shocked to see the factory and conditions where these stones are produced.

While defending natural diamonds, Mr Linney has acknowledged the impact of lab-grown diamonds, saying his business has certainly seen a drop in sales of $4,000-8,000 diamond rings, where buyers in that market might be opting for synthetics.

Myrtle Polymenopoulos, the retail operations manager for Austen & Blake in Australia and New Zealand, which sells both natural and lab-grown diamonds, said lab-grown diamonds were not replacing natural diamonds but expanding the market instead.

"Lab-grown diamonds are reshaping the world of jewellery," Ms Polymenopoulos said.

"They have made larger stones, distinctive settings or bespoke creations accessible without stretching a customer's spend.

She added that it would come down to the customer's perspective and priorities when deciding which kind of diamond to buy.