Should I still buy art for long-term investment?

09 Oct 2020

By:

Aspire Art Auctions

Art-as-Investment

Steady growth with astonishing peaks has been the hallmark of the art market over the last few years, creating the perception of a safe hedge against inflation. But can it still be viewed as such? What do international and local auction results indicate about the strength of the market? Total auction sales for the period June to August, according to MutualArt, have shown, not unexpectedly, a decrease in activity with areas most affected being the UK (63%) and USA/Canada (50%) while the rest of the world and Europe has only seen a 23% and 21% contraction, respectively, according to MutualArt.

 

While there is some speculation of the art market boom fizzling out, there is no doubt that African and South African art sales are booming. Although the African art market represents only a small percentage of global art sales, the South African art market accounts for most this, and the rate of growth of this market in recent years has outperformed the larger international capitals.

 

The art market is, of course, not one unified market but is vast and differentiated by several factors such as category (including Post-War & Contemporary, Impressionist & Modern), location (such as Europe, USA, Canada and Asia) and media (Painting, Sculpture, etc.) – each of which performs differently. With ever-growing interest in modern and contemporary African art, the international art market has witnessed an exponential increase in prices achieved for African artists, delivering unprecedented results at auction and steadily increasing prices for selected artists.

 

In the Contemporary Art Market Confidence Report, published in May 2020 by ArtTactic, William Kentridge jumped from number 25 in 2009 to number 6 in 2020 in the long-term Confidence Indicator ranking. It is noteworthy that Kentridge’s Drawing from Stereoscope (Soho in 2 Rooms) sold for R6,600,400—a world record for the highest price ever paid at auction for a Kentridge drawing—at Aspire’s auction in 2018, proving that it pays to sell with the best.

 

South African-born Marlene Dumas, who also features prominently in the top 25 of the long-term Confidence Indicator, achieved exciting results locally when her painting, Love Lost, sold for over R7,2 million in 2019 and Oktober 73 sold for over R7 million in 2020, both at Aspire Art Auctions. The global reputation of these artists no doubt makes the acquisition of their works an attractive—and potentially lucrative—investment. Art collectors will be paying keen attention when a highly desirable, early painting by Dumas comes up on Aspire’s February 2021 auction in Cape Town.

 

While these results stimulate confidence in the local art market, an ever widening array of art on offer can confuse potential art buyers. Who are the top African artists? Which works fetch the top prices? Where to begin collecting? How to develop a collection to ensure sustained value and growth?

 

There’s no doubt that African art is hot property right now. Yinka Shonibare CBE, El Anatsui, Abdoulaye Konaté and Kudzanai Chiurai are amongst the most sought-after contemporary artists. Earlier South Africa masters such as Dumile Feni command high prices. His extraordinary charcoal drawing, Children under Apartheid, commissioned for a United Nations campaign against child abuse and exhibited in the UN building in New York from 1987–89, was sold by Aspire in 2017 for an impressive R1,250,480.

 

African photography has become a key focus area for international museums and private collectors alike, with photographers such as Malian Malick Sidibé, Kenyan Cyrus Kabiru and South Africans Zanele Muholi and David Goldblatt leading the field.

 

Aspire’s recent sale of Modern and Contemporary art in Johannesburg yielded impressive results, with many lots selling well within and above their estimate range – a resounding statement about the continuing strength of the local art market in challenging economic times and within a newly social distanced environment.

 

The auction focused on South African art and included works from 10 African countries (Benin, DRC, Ghana, Mozambique, Namibia, Nigeria, Sudan, Togo, Uganda and Zimbabwe) as well as representing artists from Europe, the UK and USA.

 

The star of the sale was Edoardo Villa’s magnificent large-scale steel sculpture, Traverse, from 1957 which, after competitive bidding, sold for an astounding R4,893,400, more than R1,8 million above its high estimate and setting a new world record at auction for the artist, surpassing the previous record also held by Aspire for the sale of Black Construction [sold as Vertical Composition] (1958) in 2017 by over R3 million – proof of the buoyancy of the local art market.

 

While investing in art is growing in popularity, art should always be bought as a long-term investment. Flipping art—the term for rapid re-selling—is not a good practice and undermines the art market. It’s important to buy with an eye on the future and to obtain the best advice before buying.

 

What affects collectability? Top works attract top prices. Collectors determine the ultimate price they are willing to pay, thus setting new records. It often comes down to how an art work is judged by the tastemakers of the art world. Local and international exhibitions profile artists and can play a major role in marketing their work – Mohau Modisakeng was one of only two artists in the South African Pavilion at the Venice Biennale in 2017.

 

Museums underscore an artist’s importance and collectability. Kentridge’s film, Mine, was bought by the Smithsonian Institute’s National Museum of African Art in Washington DC. Zeitz MOCAA—with its focus on art from Africa and the African diaspora produced in the 21st century—and the Norval Foundation—with its in-depth survey exhibitions—are having a significant impact on the local art market.

 

With increased volatility in the investment market, the art market is a resource for buyers looking for assets that will at least hold their value and hopefully increase in value over time – if they do their homework. The art market is not an investment instrument in the usual sense but should be seen as more of an asset class for family estates, and a means of passing on value from one generation to the next. To research artists and browse the catalogues for upcoming auctions, see www.aspireart.net

 

Savvy collectors can still buy art with great growth potential. As with any investment, the answer lies in doing your research, seeking advice from trusted sources and buying the best you can afford. Senior Art Specialists at auction houses such as Aspire Art Auctions, with years of experience in the art industry, can offer useful insights into the art market, illustrating what top works have fetched locally and internationally at auction, where the results are made public. Such information is useful in providing guidance to potential art collectors on how to build value and avoid pitfalls. For more information contact

https://aspireart.net/specialists/

 

Further reading

A Guide to Contemporary Art https://aspireart.net/contemporary-art/

 

A Guide to Fine Art https://aspireart.net/fine-art/

 

A Guide to Modern Art https://aspireart.net/modern-art/

 

A Guide to African Art https://aspireart.net/african-art/

 

Collecting Photography https://arttimes.co.za/collecting-photography-aspire-art-auctions/

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