Contemporary Art Market Predictions with Matt Beasant
May 5, 2016
Even the best picture frames won’t make you want to put your investment statements on display. This is one of the reasons why art is so compelling; as it ascends in value, you get to enjoy it on your walls.
These days we take for granted that paintings can be used as a store of value. In fact in the last twenty-five years, contemporary art in particular has returned the largest profit percentage of almost any other commodity.
Yet less than 50 years ago, the majority of art in New York was collected by a small group of people such as the Guggenheims and the Whitneys. Back then art wasn’t necessarily purchased as a store of wealth. Bruce Helander’s recalling of a story involving Pollock and de Kooning illustrates this change. A struggling Pollock once convinced a landlord to show his work in a building lobby. Despite his efforts the work didn’t sell. The landlord was implored by Pollock to purchase a large piece but the landlord passed on the offer. And what a mistake that was. Thirty years later the same piece sold to the Australian Museum for $30 million.
If you’re new to collecting, navigating the current trends in the art market isn’t always straightforward. But after listening to One Art Nation’s expert panel on Contemporary Art Market Predications, the forces behind the scenes of this seemingly opaque world became clearer and easier to understand.
The first aspect is supply. Unless you have the ability to time travel or bring an artist back from the dead, non-contemporary art is in finite supply.
But here’s the twist. Only the most eccentric collectors will opt to be buried with their works of art. So as the baby boomer cohort downsizes there will be more work from private collections available to purchase.
Price also plays a huge roll in the world of art. Currently a lot of contemporary art by a living artist is (gulp) overpriced. No one likes to overpay for anything – art included. Like any market, there is always the possibility of volatility and this is especially true with contemporary art. Learning about these trends and past crashes in the market is the best way to build a collection while keeping an eye on the bottom line.
One way dealers can create price stability is by controlling supply. By keeping some of an artist’s work out of the market, dealers can prevent oversupply while increasing demand. This in turn prevents prices from dropping; essentially killing two birds with one stone. And with these two birds you get collectors who are hungrier than ever for some artists’ work. The take away from this panel discussion is that your appetite for art collecting should be well planned.
Disclaimer: No birds were harmed in the writing of this blog.
For more insights into current trends in the art market check out the entire video featuring One Art Nation’s expert panel. Watch Now!