Investing in Art and Photography
"... the search for alternatives to the classic forms of investment will ensure that art as an asset class will enjoy an unimagined upswing."
Wolfgang Wilke, vice-president, Dresdner Bank's economics department
The art and photography sector is awash with stories of savvy buyers, who spotted the potential of an artist at an early stage, and are now cashing in on the deal.
And if you can find the next Warhol, good on you.
Here at Paul Fraser Collectibles we advise those investing in art to focus on the more secure end of the market - the works and autographs by the blue chips of the field.
These are the areas that have traditionally shown the greatest appreciation and the least volatility, whether you're talking about old masters, impressionists, or the contemporary stars of today.
Reasons to invest
A growing market: 1m people worldwide now consider themselves serious art collectors, compared with just 10,000 in 1980 - a testament to the increasingly global nature of the art world, with China, India, Russia and the Middle East now particularly prominent.
Christie's art sales reached an impressive $7.1m in 2013, a rise of 16% on 2012's figure. The figures are the result of a burgeoning art market, spurred by new collectors in Asia.
Globally, the art market saw a 8% increase in 2013, rising to $65.9bn. However, it fell just saw of the record for art sales, which was seen in 2007 following a $80bn showing.
Chinese influx: The world's rapidly second largest economy is also the second largest art market, narrowly beaten by the US.
China accounted for 24% of art sales in 2013, down 2% from 2012. However, this is a good sign for the moarket as prices begin to normalise following concerns over a buying bubble.
Contemporary art is a boom sector: The contemporary art market grew by 15% in 2013, posting its first €1bn in auction house turnover. This rise is attributable to a number of record sales, rather than a rise in consignments.
Limited quantity: The majority of the leading investment-grade artists are no longer with us. This finite supply coupled with a growing demand ensures that values are rocketing - now is the time to capitalise.
o Contemporary works of art at auction in May 2013 saw an compound average return of 18%, according to Mei Moses
o Chinese art market up 28% in 2013 says ArtTactic
o Mei Moses states that impressionist and modern art saw a rise of 1.3% in 2013
Leonardo Da Vinci's Salvator Mundi became the world's most valuable piece of art sold at auction when it made $450 million in 2017.
The Qatari royal family bought Cezanne's Card Players for $250m in 2011 in a private sale, a then world record for a work of art.
Jeff Koons' Balloon Dog became the most valuable piece of art by a living artist in 2013, selling for $58.4m - a 73.2% increase on the $33.7m record set by Gerhard Richter is 2012.
The world record for art by Juan Gris was raised by 98% in February 2014, as Nature morte a la nappe a carreaux (1915) made $56.6m.
Considered a bellwether for the post-war art market, Andy Warhol's artist record was raised 48% in November 2013, with Silver Car Crash (Double Disaster) making $105.4m.
Rhein II by Andreas Gursky made $4.3m in November 2011, setting a new mark for the world's most valuable photograph. It beat the previous record of $3.89m by 11.3%, set by Cindy Sherman's Unknown #96 in May 2011.
o Artists' autographs
Salvador Dali signed photographs rose in value by 12.48% pa between 2000 and 2013, from £325 ($515) to £1,500 ($2,514), according to the PFC40 Autograph Index.
Picasso signed photographs rose in value from £1,400 ($2,225) to £4,250 ($7,125) between 2000 and 2013, at a rate of 8.92% pa.
Thinking of investing in art and photography?
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