Your guide to investing in art

As much as one would like to believe that art is bought from the heart, a majority of buyers, over 70 per cent, see it as ‘passion with an investment value’. According to a recent survey published in The 2016 Art & Finance Report (by Deloitte Luxembourg and ArtTactic), there has been an increase in art collectors’ concerns about the potential return on investment when buying art.

While 47 per cent cited it as an important factor in 2014, the number increased to 64 per cent this year. In the West, there are companies like AXA Art, which are dedicated to protect your buy, and banks such as Privatbank Berlin that provide loans solely based on your art collection. More people now want art and other collectibles to be included in their wealth record, says the 160-page report.

In India, art as a form of investment is still in a nascent stage, says Sharan Apparao, founder of Apparao Galleries in Chennai. Investing in art, in contrast to the colours that make up a canvas, is a dark alley that few tread. Unfortunately, it is also true that if one plans to plunge into this game, they should have a heavy wallet, and plenty of patience.

“The entry price into investing in good art has increased from Rs.20,000 a decade ago to Rs. 5 lakh now. And if you invest around that much in an artwork, you would probably get Rs. 30 to 40 lakh in 20 years,” says Ashvin Rajagopalan, who started Ashvita Fine Art, an art advisory, in 2012. “Meanwhile, I know a client who invested two crore rupees in an artwork, and now, five years later, it is worth Rs. 15 crore. No real estate investment can do that for you,” he adds.

He says that his youngest client was a 60-year-old man. “Most get into it once they are settled in their lives, have a house and a car to their name, and are now indulging in their passion,” says Sarala Banerjee, founder of the oldest art gallery in the city, Artworld. However, there has been an increase in the number of people — both young and old — buying art, thanks to the boom in online art galleries in recent years.

“Despite the global art market slowing down, the online market has grown incredibly quickly in recent years. The Hiscox Report showed the online market growing 24 per cent to $3.27 billion in 2015,” writes Jonas Almgren, CEO of London-based online art gallery, Artfinder, in an e-mail interaction.

“People feel that buying art is difficult, or expensive, or exclusive. On Artfinder, prices start at under £50 and we offer a global two-week money-back guarantee, so you don’t even have to make your mind up straight away,” he says. Today, there are more platforms — both online and physical — that are focussing on providing art that’s ‘affordable’.

City-based gallery Vinnyasa Premier Art Galery organises an ‘Annual Affordable Art Show’, and Forum Art Gallery comes up with a ‘Miniature Art Show’ every year.

“One should bear in mind that art is a natural hedge against inflation. It retains its value even through major financial crisis. As real estate, stocks, gold and silver have been underperforming, this is the correct time to look into art,” says Ravi Dhanda, founder of Sunny Sistems.

But where does one start?

Here are five pointers from experts that can help you make a smart buy:

Visit galleries

There is no shortcut to buying good art. One must hop into different galleries and see the collection for themselves. Almost every gallery will try to push their artists. And if the same artist is being featured in, say four out of the five galleries you visit, it means that he or she is in demand, and active in the art market.

This, in turn, means that the value of the artist’s artworks has more chances to rise in the years to come.

Keep your eye on the ball

Go through magazines like Take on Art, ART India, and more, to get an idea; and keep an eye out for which artists’ works are being auctioned (at Christie’s, Sotheby’s, Bid & Hammer, Pundoles, Saffronart).

Don’t restrict it to those in your city. Of the top 50 artists in India, there are just two from Chennai. 90 per cent of the art market is dominated by just a bunch of 10 artists which include names like M.F. Hussain, S.H. Raza, F.N. Souza and more. Now, if you are too lazy to keep a tab on this, there is always an option to get an analysis of the art market, who to buy and get a glimpse of the forecast, on platforms like Artnet, which charges $3,000 for a week.

Research about the artist

Any artist with a history, or who is senior and has been written about a lot, is of value. For example, works of KCS Panicker, who started the Progressive Painters’ Association, still come up in auctions, and sell for around Rs. 15 lakh. Or, Douglas. He is part of the Cholamandal Artists’ Village, has exhibited internationally, contributed to National museums, and doesn’t come up with many works in a year. His work ranges from Rs. 12 to 15 lakh. Meanwhile, there are a few artists, who are stuck at one price for the past decade, despite being extremely talented.

However, there are few other emerging artists whose works have increased from less than Rs. 5,000 in 2005 to close to one lakh in 2015.

Go for top quality

There are no red corner sales or discounts when it comes to art. So, if you are getting a Hussain for one lakh, it would be because it is a scribble on the back of a paper. A good four-feet by four-feet work of a horse, done by Hussain in the 60s would be nothing less than a crore and a half. If you have two crore rupees, instead of buying 200 paintings, go for three. Unless it is a blue chip, it is not really an investment.

Buy what you can live with

Avoid herd mentality. When you are buying an art, it’s a long-term commitment. You cannot get rid of it even if you want to. Mostly because there are not many reselling platforms (a few of them are, eBay, Art Rehome). Look for artworks that speak to you. For example, if an artist is doing a series on colonialism, environment, or freedom from slavery, and you buy his work, it becomes a part of the conversation with your friends and family. And if they have a similar slant of thought, they are going to buy the artist’s works. This chain, almost like a butterfly effect, appreciates the artist’s price, giving you greater returns in future. It is worth bearing in mind that something you can afford this year, you might not be able to afford next year.

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Printable version | Oct 15, 2021 9:15:49 PM |

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