Investing in Art
First of all, art is for pleasure and enlightenment. However, with the global art market booming, art buyers increasingly take into account making a potential profit from their purchases. Not so long ago, a painting of two Tahitian girls, “When Will You Marry?”, by Paul Gauguin has been sold for $300m, thus becoming the most expensive work of art ever sold. It had been owned by a Swiss collector Rudolf Staechelin who sold it to a Qatari buyer in February this year. Surely for Mr. Staechelin artwork has proven to be an excellent investment with staggering returns.
But, is the case of Gauguin’s painting a rule or an exception? Well, it depends on the art. The old masters category is the least volatile, demonstrating stable results over the past years, but it has also the least growth potential of all other categories. Impressionist and Post-Impressionist works (like Gauguin’s), as well as Modern Art works are clearly kicking. According to the Sotheby’s sales report for the first half of 2015, global sales of Impressionist and Modern Art grew 21% worldwide compared to the same period in 2014, reaching $1.09 billion. Although expert opinions regarding investing in Contemporary Art still differ, Sotheby’s report shows encouraging figures. Its global auction sales of Contemporary Art in the first half of the year increased 18% to $1.26billion driven by a 16% increase in new bidders.
The new bidders. Well, the art market, like most major business sectors in the 21st century, operates in a global environment. Thanks to the Internet, it is more global than ever. New participants, both buyers and sellers, are emerging every day making the global art market continuously growing. The first half of the year at the world’s leading auction house saw a nearly 49% increase in number of online bidders. This phenomenon is not only causing growth, but begins to alter and improve the art trade itself in many aspects, for instance, increasing price transparency. However, much remains to be regulated.
On the basis of the above-mentioned figures and other latest reports (Artprice, TEFAF, etc.), it seems that today’s art market is more mature and liquid than before, therefore, thinking of art as a source of long-term profit doesn’t sound unreasonable at all. Art as investment is increasingly accepted in both the artistic and financial worlds altough it can be risky and costly. For most people who like art, the most sensible approach is to buy what they like and can afford. One day they might sell it for a considerable profit or keep it on the wall in spite of the prospective enrichment because artwork is never without a value.