Art market enjoying uptick, leading index finds
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According to a leading index, the global art market is seeing a major uptick as investors search for an alternative to other, more traditional investments such as stock and shares.
The index, Artprice, confirmed that the art market has bounced back all over the globe following a slump of more than 10 per cent over the course of 2015. Regarding what was driving the impressive uptick, the index suggested that Chinese collectors had played a crucial part in this, with prices rocketing as a result of some major Chinese purchases.
This price point peaked in May of last year when a Picasso piece, entitled The Women of Algiers (Version 0) sold for $179 million. This represented the highest price ever paid for a piece of art. (Dh657 million, €162 million), the highest price ever paid for a work of art and heralded a new dawn for global art investors and the art marketplace as a whole.
However, despite this huge purchase, due to a “readjustment of the Chinese market,” sales over the rest of the year fell almost $2 billion lower than the $17.9 billion recorded in 2014, Artprice confirmed.
However, the index also said that the first two months of this year have seen an impressive start to 2016 and are signs of a further uptick in the art investment arena.
Artprice’s president, Thierry Ehrmann, reported that investors were returning in droves to the art sphere as a result of ongoing uncertainty in other investment classes, such as bonds, and were viewing art “as a real alternative” to stocks and shares. Mr Ehrmann also confirmed that, over the first seven weeks of 2016, art prices saw a recovery of more than 7.2 per cent. This recovery, along with interest rates sitting close to zero and far easier access to auctions via the web, meant that “all the conditions are in place for the price levels to rise further,” confirmed Artprice.
The body went on to say that, if the decline in interest from Chinese buyers – as a result of poor local economic conditions – was removed, art prices remained stable over the course of 2015. Although Chinese buyers took the top spot for art purchases in 2014, beating American investors into second place, last year saw Chinese buyers lose the gold medal position. Despite just 12 per cent of the total worth of art that was sold coming from US-based sellers, the country accounted for 38 per cent of all art purchases made last year.
Regarding art stemming from China, there are positive reports of an uptick, according to the Hong Kong-based Takung Art Co, which operates an online platform through which investors can trade artworks. The company said that it had seen major growth in valuations for a portfolio of assets including paintings, jewelry and precious gems, despite the ongoing issues in the Chinese economy. Indeed, the economic conditions are meaning that those investors who once turned to real estate and stocks are now considering art, taking a longer-term view of their investments.
The company said that the notional value of its series of contemporary pieces had risen by an impressive 700 per cent to $179 million since its launch at the tail end of 2013.
Founder of Takung Art Co, Zhou, a former stock investor, told the Shanghai Daily: “We all want an easy, safe place to earn money. Here I know my assets are safe, and for a long time.”
However, while online art trading platforms seem to be becoming popular – two examples are Beijing’s Hihey.com and New York’s Artspace, the traditional art auction houses do not believe that these platforms offered a sound and reliable way to invest in art.
Philip Hoffman, chief executive of the London-based Fine Art Fund Group in London, said: “A lot of these people (using the online platform) simply have the financial approach with no art understanding whatsoever.”