Why some investors are choosing art over property as the real estate market heats up
Artist Tania Blanchard had just finished building a new home studio when COVID-19 hit, and she got nervous as the economy plunged into recession.
Important points:
- Auction houses say art sales have doubled since the arrival of COVID-19
- More and more investors are choosing art over real estate
- The new HOTA art gallery on the Gold Coast welcomed 28,000 visitors in its first month
“I was really scared that I wouldn’t be busy and that people couldn’t afford art,” said Blanchard.
But their concerns were short-lived.
As people spend more time at home, doing renovations, and unable to book overseas travel, it is experiencing a renaissance inspired by COVID.
Bought-out art lovers opened their pandemic wallets and started spending a lot.
“Suddenly I was really busy,” said Ms. Blanchard.
“It was a really crazy time.”
Singer Amy Shark recently bought a Tania Blanchard painting. (
Delivered: Tania Blanchard
)
Ms. Blanchard saw a significant increase in inquiries for valuable assignments.
“The jobs I did … most of them were great works of art,” she said.
“People were ready to spend that money.
“They thought, ‘Okay, we’re investing in the art that we’ve wanted for a long time.”
Picasso or property?
Charles Ninow, the art director at Webb’s auction house, says art sales have increased dramatically. (
Delivered: Charles Ninow
)
According to New Zealand auction house Webb’s, more and more investors are choosing art over real estate as the real estate market continues to expand.
Art director Charles Ninow said buyers were increasingly looking for alternative investment opportunities.
He said that Webb’s art sales had doubled in the past few months as people tried to diversify.
“I think people can see the real estate market is incredibly hot, I think they can see the stock market is incredibly hot,” he said.
“In the age of very, very, very low interest rates, people are looking for other things to invest their money in.
“We have increased our business volume dramatically.”
Auction houses say interest in art is resurfacing. (
Delivered: Charles Ninow
)
Ninow said that while the art market hasn’t kept pace with the sharp rise in property prices over the past 50 years, it hasn’t lagged too far and is still an attractive option for investors.
“When you invest in the stock market and invest in Bitcoin, you are really betting on an idea, and when that market falls, the money is gone,” he said.
“But with a work of art you actually have something physical.
“You don’t have to pay taxes on reselling them, and the prices of art don’t go down.
“What other things can you buy that give you a cultural experience, something that you enjoy, that also increases in value – I mean, it’s pretty unique.”
“Great art values”
Smith & Singer recently sold Fred Williams’ painting Guthega Landscape (1975) for $ 1.2 million.
Delivered: Smith & Singer
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Smith & Singer auction house, formerly known as Sotheby’s, regularly conducts art auctions in Melbourne and Sydney and has seen an increase in activity as well.
CEO Gary Singer said travel restrictions meant art lovers could spend money on other interests.
“People are more involved with us than they were before COVID,” said Mr Singer.
“They’re ready to get involved because they don’t spend money on other things like travel, they don’t go to restaurants that often, and they don’t shop as much.”
Mr Singer said the majority of his buyers are motivated by a personal or emotional connection with works of art, rather than a particular asset class.
“It’s a by-product of her passion and interest because she values great art,” he said.
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“People must have a real interest in choosing to buy it, maintain it, and enjoy it in the meantime.”
He said that people who bought significant works of art generally had other investments as well.
“They’re just choosing to maybe buy an investment or something they enjoy at the same time.”
New gallery attracts huge audience
The $ 60.5 million HOTA Gallery is now Australia’s largest regional art gallery. (
Delivered: HOTA
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Australia’s newest art destination is the $ 60.5 million HOTA gallery on the Gold Coast.
It has attracted an overwhelming number of patrons since it opened four weeks ago.
CEO Criena Gerkhe said 28,000 people have visited the gallery since it opened on May 8.
“We beat without a doubt about what we expected,” said Gerhke.
“We expected a lot of interest, but that really blew us away.
“So there is definitely something in the air.
“People long for this connection with art and culture.
“People were locked up, you know, and they didn’t have the opportunity to have that human connection.”
Burleigh Heads artist Tania Blanchard with works from her latest series Gravitation. (
Delivered: Tania Blanchard
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For the artist Tania Blanchard it is a connection across national and international borders.
“I sell a lot of my art at home and abroad,” said Ms. Blanchard.
“I have just sold two paintings to Barcelona and I have an order for someone in Germany.
“It’s an absolute blessing, I just don’t take it for granted for a second. I just love what I do.”