A dealer’s view of the market
Whatever the economic situation, art will always be attractive to serious investors. International fine art dealer and agent Simon Shore says that its appeal lies in its consistency.
“When economies are strong and there is general confidence, people will buy art,” he says. “Conversely, when economies are weak and banks are offering little or no interest on held funds, people also put money into art.”
He notes that Deloitte’s Art Market report in 2012 asserted that economic uncertainty has increased client demand for art and collectible investments: 53% of wealth managers stated that the challenging economic environment is the main motivation for their clients to include art in their overall wealth portfolio (up from 28% in 2011).
“A large majority (60%) of wealth managers believe that we will see stronger demand in the future for ‘collectible and emotional’ assets, as a result of the current economic uncertainty in the world,” he adds.
He says another advantage of investing in art is that the art market is a truly global market and paintings can often transact like an international currency.
“A Monet Water Lilies has the same value in Sydney, Honk Kong, London and New York. There is a universal understanding of its market value. There are certainly regional anomalies that affect an artist’s market value. For example, during the recent Euro crisis threatening the countries in the Olive line, a lot of Spanish wealth was invested into artists such as Miro and Picasso.”
Shore notes that the art market is exceptionally strong in the Impressionist and Modern sector at the moment. The recent auctions in London and, before that, in NYC were positive. The second highest price achieved for a Monet was established at Sotheby’s London at $54m.
The Sotheby’s Evening sale alone made $247m with bidding from Russia, Asia and South America ensuring that 91% of the lots sold.
“Home grown talent such as Hockney, Freud, Moore and Lowry are performing very well,” he says. “In the Modern British sector, David Hockney’s ‘With Conversation,’ painted in 1988, recently sold at Christies for £1,650,000.”
In the coming years, he anticipates that the market will continue to develop globally with various regional socio-economic factors having an impact.
“For example, the continued threat of worldwide sanctions against Russia’s stance on the Ukraine will provoke Russian personal wealth to be moved into art. Interest rates are very low and there is a lot of cash out there that has to find a home.”
Shore believes that the fundamental difference in collecting fine art that other sectors don’t offer is the pleasure and enjoyment art gives to its owner.
“I have never, in all my years of dealing in fine art, known any one of my clients to frame and hang on their walls a shares certificate,” he says.