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The mechanics of the art world can appear complex and mysterious when you are new to the scene. Andrew Thomas from Michael Lett Gallery believes buying art should be an enjoyable and rewarding affair, and highlights some factors to consider when investing.
The art industry is booming. Annual sales run into billions, and continue to rise at impressive rates. As the value of the market and potential returns from owning art have increased, so too has the interest in investing or speculating in the art market.
There are now even websites – such as artrank.com – that claim to measure all the once delightfully intangible aspects of an artist’s ‘worth’ and generate reports on which artists to buy, what artworks to sell, and when. Yet this more calculated approach to risk management feels at odds with the inherent value of artistic creation, and there is undoubtedly much more to be gained by taking a sympathetic, yet educated, approach to acquiring artwork.
In New Zealand we have traditionally operated on the periphery of the global art centres, in a market that is much more localised and considerably less heated. However in recent years our artists and arts professionals are increasingly crossing the globe seeking out study opportunities and events such as art fairs and biennales that place New Zealand art alongside the very best the world has to offer.
It’s an exciting time to consider investing in our art market, as the quality of work being produced here is extraordinarily high, and its reach is constantly expanding.
So where do you begin – how do you take an interest and appreciation in art to the point of owning something, or starting a collection? There are many ways to approach this, and certainly no hard and fast rules. But there are some things you can do that will make navigating your way to art ownership both more enjoyable and more rewarding.
Firstly, it might sound obvious, but visit galleries! This is an important way to develop your taste and really understand what it is you are interested in, while at the same time working out what those in the industry believe is worthy of your attention. When you buy artwork you are buying into an idea – a thought process that ends in what you see in front of you. Understanding what the work is about, or not understanding it but open to being challenged by it, is key.
Public art galleries are important in helping us understand why different kinds of artwork are relevant now and how they will be in the future. So if you are looking to own something with investment potential, watching what the public galleries are exhibiting – and even acquiring for their own collections – would be smart.
Making a purchase
Having spent some time visiting galleries and understanding where your interests lie, you then need to consider your options when it comes to purchasing something. Broadly speaking, you have two choices. You can buy from a dealer gallery, generally a primary market gallery that offers artwork direct from the artist. Alternatively you can purchase at an auction house, which deals in the secondary market and offers work on resale from previous owners.
Don’t be intimidated by commercial galleries. They are friendly places, and getting to know them opens up a world of opportunities. To really get the jump on new artists, and new artworks, this should be your hunting ground. Gallerists always have their ear to the ground and are usually the first to spot new talent.
The earlier in an artist’s career you purchase something the lower the price will be. At the same time, there will be mid-career and senior artists who the gallery has worked with for a long time and has a lot of knowledge about. They will be able to pass on this knowledge to you, helping you distinguish from a wider selection of work the piece that is right for you. They may also introduce you to possibilities you hadn’t considered.
Some of the best, and most rewarding, artworks make absolutely no practical sense at the time. Not being able to fit the work nicely onto your wall at home shouldn’t necessarily be a barrier to ownership. But it may take a little while to become adventurous to this extent.
Auction houses periodically pull together a catalogue of artworks by a diverse range of artists. They back themselves on their expertise to attract the right buyers for those works in a short period of time. For this reason sale prices at auction are not always a true indicator of the market. Auction, however, does occupy a fundamental role in the art market and many important works are offered there – sometimes selling for record prices but sometimes for a bargain. As with anything, the more knowledge you have the better placed you will be to make decisions.
No matter where you choose to make your purchase, it could feel financially painful, although you can often negotiate interest-free payment terms. And paying that little bit extra for the work you really want, rather than the one you can afford, will nearly always pay off in the long run.
Lastly though, remember that art is created for many reasons, but not to be an object of speculation. Think of making some money along the way as an added perk of ownership. It’s certainly something that can be done, but for all the savvy and bizarre algorithms out there, you’ll win some and you’ll lose some. How you really win is by reaping the rewards of living with something remarkable.
BIENNALE: a large arts or music festival, held every other year.
COMMERCIAL GALLERY: a business that generates income by selling work on behalf of an artist.
PUBLIC GALLERY: a place where works of art, purchased or acquired with public funds, are displayed.