News & downloads

Art market trends - Contemporary versus Classic, and advice about whether to follow trends or buy against the market

Wednesday, April 18, 2012

In the last 15 years cutting edge Contemporary Art has seen a meteoric rise in its status on the art market. It is seen both as a sector that buyers should have in their collection as well as an accepted alternative asset class. This can be attributed to various factors not least the naturally evolving changing tastes in all things artistic – fashion, design, architecture, art - and because even the buyers in their 50s grew up with Pop Art and Abstract Expressionism. Don’t forget that Andy Warhol is now a ‘Classic’ – he died only 25 years ago. Also, the art market has developed into a worldwide commercial phenomenon through the marketing of the major galleries and auction houses, which has had a profound impact.

These facts do not explain why collectors are buying at such extraordinary levels for internationally unrecognised artists who lack a strong back-catalogue of work. Why are they spending on such artists? The reasons are varied.

· The changing tastes of collectors, who start collecting Contemporary pieces from their first purchase. Previously collectors might have started with 19^th Century works or even Old Masters. The reasons stem from the age of the buyers who are now younger than in previous generations and the time-poor, cash-rich lifestyle which makes little time for a scholarly approach to collecting.

· Some Collectors want an instantly recognisable trend-driven ‘brand’ on their walls – artists have pandered to this collecting habit by producing immediately recognisable images or sculptures. A Warhol or Hirst will always be recognised by friends or colleagues, or indeed clients in the case of the big corporate collections.

· Buyers want to take advantage of an investment opportunity. The art market for Impressionist and Modern Art boomed in the mid-eighties and few thought that prices would ever recover. They did, and recently that has caused a huge amount of investment buying for the future which has caused massive price booms for even the youngest artists.

The current trend for buying established Contemporary artists, such as David Hockney, is one to follow. The market for working artists with a wealth of strong work behind them will only improve over time. New buyers looking at immediately popular artists such as Banksy and Blek le Rat should be watchful that over time the shallowness of such work will become apparent and their decorative value will wane as the trend dies down. Buying new artists will always be a slight lottery in terms of making money back in the long term but that is not to say that one can’t. For investment purposes I would always recommend that one focuses on buying artists with an established auction record, or at the very least from a gallery with a track record of having found artists that have gone on to international acclaim. There are numerous examples of works having been acquired for next to nothing then sold years later for millions: the Rockefeller Rothko sold for $73m in 2007 having been bought for only $8,500 in 1960.

There are fewer and fewer buyers of 19^th Century works of art as the supply of great works of art wanes. This sector is stagnant and bargains can be had if you focus on quality. The old master painting market has been struggling for supply too, though not to the same extent as it straddles such a huge range of art and artists. Going against a specific art buying trend is a good idea but I would strongly suggest that buyers consult a good art advisor before spending money on unfashionable subjects. The old adage of buying the best that you can afford rings true. The fabulous Stubbs that appeared at auction this year and made a record £22.4m was a good example of a collector buying the very best of a particular art market sector. Even though Stubbs is not the most fashionable of artists to the newly rich, and newly art-buying, crowd, it is likely to appeal to them in the future.

Obviously there is always a place for cutting edge Contemporary work in a collection and an 80%/20% split between established and emerging artists is an appropriate ratio to follow. A common theme in much of the best interior design is now following a trend of hanging Old Masters and Impressionist works with strong, coloured abstracts. This works very well if planned accordingly and associated with the correct furnishings. One can easily have a room of 19^th Century watercolours in the same house as a room of minimal Bauhaus work. Collections never follow one specific plan, they reflect the owner’s appreciation which makes collecting so rewarding. The simple answer to the brief of this article is that buying what you love, with good trusted advice, means that a collection can inspire and hold its value.

Ray Waterhouse is the owner of Fine Art Brokers, one of the world’s leading art advisory services.

Ray.waterhouse@fineartbrokers.com

www.fineartbrokers.com