HOW MUCH IS THAT PAINTING REALLY WORTH? As the global art world continues to experience dips and shocks, questions about the value of art seem more pertinent than ever. Scott Reyburn speaks to collectors, gallerists and art advisers about the best strategies for collecting now – and into the future The art market is experiencing a dip. A combination of economic and political headwinds, ranging from hiked interest rates and a real-estate crisis in China to the bloody conflicts in the Middle East and Ukraine, have slowed demand at international auctions and fairs. Aggregate auction sales at Christie’s, Sotheby’s, Phillips and Bonhams declined 16 per cent year-onyear in the first half of 2023, according to the annual Survey of Global Collecting published in November by Art Basel and UBS. Increasingly, low-estimate or below-estimate bidding has become the norm at most art auctions, even at the very top of the market. In November, Sotheby’s sold the collection of the Manhattan art patron Emily Fisher Landau. The outstanding single-owner offering of the year, these major-name 20th-century works raised US4.7 million with fees, considerably less than the presale estimate, when fees are added. The star lot of the sale, Picasso’s 1932 canvas, Femme à la montre, attracted just one bid above a price set by a pre-auction financial guarantee. It sold for US9.4 million. 88
“There’s a palpable sense of nervousness,” says Robert Read, head of art and private clients at the London-based insurer Hiscox. “There are bargains, especially if you’re not buying contemporary art and you’re prepared to hold on to your investment. The days of making a quick buck and flipping what you have bought are behind us for the immediate future,” he adds. “The market is now one for medium- and longterm investors. It makes sense to buy something you like, because you are going to be looking at it for a while.” So maybe this is a good moment, as Read suggests, to acquire some mood-uplifting, soul-enriching art. But where to begin? What, exactly, does the word “bargain” mean in a market as intimidatingly opaque and expensive as the US-billion-a-year global art trade? Where can value be found when prices have so many zeros? What represents a good medium- or long-term investment? Or do you just buy what you like? “You have to consider yourself an explorer,” says Luc Haenen, an Antwerp-based heart surgeon who for more than 20 years has been acquiring works by emerging artists from younger galleries. Belgian collectors have a reputation for being astute navigators of the market for contemporary art, without relying on advisers. On a relatively modest budget, Haenen has managed to acquire paintings by coveted, difficultto-source names like London-based Issy Wood and Antwerp’s Ben Sledsens, artists whose works have recently re-sold at auction for more than US0,000. “What helps is to start off locally; look for a museum or a gallery nearby,” Haenen suggests. “I’m very keen on academy shows. In some cases you can buy works [and at the same time] support the artist and the school,” he adds. His home town of Antwerp has a vibrant commercial gallery scene, underpinned by artists graduating from the city’s respected Royal Academy of Fine Arts, such as Sledsens and the equallyin-demand painter Bendt Eyckermans. “Be open to talk and ask, become a friend of an institution and, most of all, look look look and read read read,” he advises. Haenen is an active independent buyer in what is variously called the “red chip”, “ultra-contemporary” and “wet-paint” market for works by up-and-coming artists under 40 years old. As short-term investments, or “flips”, returns can be spectacular. In March last year, for instance, Warm, Wet ‘N’ Wild, a large 2020 rococo-inspired canvas by the thirtysomething British painter Flora Yukhnovich sold for US.6 million at Sotheby’s London’s “The Now” sale of works by fashionable young names. The work had been acquired two years earlier by a European collector from the little-known Parafin gallery in London whose “primary market” price at the time would have been under US0,000. This autumn, Hiscox published a report on the market for contemporary works resold at auction within two years of being made. It indicated that in 2022, Sotheby’s, Christie’s and Phillips sold a combined total of 1,033 such works, a 116 per cent increase on the previous year. But art-market fashions change fast. The craze for flipping, often fuelled by speculative bidding from Asia, has cooled for many once-hot names. Over the last six months, only two paintings by Yukhnovich, who is now represented by the long-established London gallery Victoria Miro, have been resold at auction and none has made more than US,000, according to the French auction result database Artprice. Buying “red-chip” art remains a gamble, unless, like Haenen, you buy it to keep, rather than speculate, thereby maintaining fruitful relationships with key galleries T hen what about the blue chips? Why not invest in those canonical older or dead artists validated over many years by eminent critics and curators? Isn’t that a smarter bet? Nowadays, investing in blue-chip art has its challenges, too. A century or so ago, back in the Gilded Age, when (after being adjusted for inflation) art prices and levels of income inequality were as high as they are today, names like Leonardo, Raphael, Rembrandt, Reynolds and Gainsborough were the market’s stars in a firmament fixed by art history. In 1914, the Czar of Russia gave US.5 million for Da Vinci’s Benois Madonna, then a record for any artwork. After the staggering US0.3 million paid at Christie’s in 2017 for the Salvator Mundi, Leonardo da Vinci remains the most expensive artist in the world, but most other Old Masters have fallen out of favour. Thanks to the influence of billionaire collectors like François Pinault (who owns Christie’s and is the founder of the Kering luxury group) and Bernard Arnault (who founded LVMH), names like Picasso, Warhol, Basquiat and even Leonardo have become 89
