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Quality Art Stays Strong

Art continues to stay strong against the ebbs and flows of the so called top performing stock and shares. From the mid-1990s till January 2008 the world (and particularly the Australian economy) witnessed one of the longest, sustained financial booms in Western history. People had money to spend and spend they did. The Australian art market became awash with vast sums of money. The turnover of the Australian art market at auction in 1996 was $37.7 million dollars soaring to $175.6 million dollars in 2007 (2008: $114.6 million dollars, 2009: $90.8 million dollars). The market over the boom period saw eight record-breaking “art sold at auction” years. In 2007 the value of Aboriginal and Torres Strait Islander art sold at auction exceeded $23 million dollars, up from $1.3 million dollars in 1996 (2008: $11.5 million dollars and 2009: $10.5 million dollars). Art and the notion of ‘cultural revival is survival’ has been the single most significant driver to elevate Aboriginal Art from almost abject obscurity some twenty years ago, to their significant presence on today’s world stage. The acceleration in art buying has occurred over the last 10 years to some significant degree as a result of a surging real estate market. The national (and particularly Sydney) fascination with all things housing-stock has stimulated a relatively new parallel economy in lifestyle television programming (the “how we should live our lives and how we should spend our discretionary income within the house” style of media) which aggressively emphasizes the importance of the home interior. Renovation television programs nightly invade the homes of millions of consumers outlining the importance of colour and art- and of a staple gun and Spot Light fabric. The result of all this “you can do change” lifestyle television has been a democratisation of the art market, which has rapidly grown as a far wider section of the community has been led to an appreciation of owning your own quality art. Across markets, whether bank shares, resources or art, there has been a flight towards quality. Astute collectors within budget have been focusing on the very best of art, be it traditional, contemporary or Indigenous, Anala Art Advisory has always put an emphasis on quality over quantity. Many investors unfortunately do not share the same thought, hence why when they buy shares and what not, they tend to go for the shot gun approach…., more is better, safer, train of thought. The figures are certainly compelling. A recent wealth report records art, as a part of its Luxury Investment Index, growing at 15% in 12 months, 61% in five years and 252% in the last 10 years. A total of 41% of wealth managers polled said that art investment funds are one of the services most relevant to their clients, up from 29% two years ago. Collectors, meanwhile, have been increasingly using investment funds. A total of 28% of those polled said that art investment funds were the most relevant art wealth management services available, up from 23% in 2011. The art market is now a mature and liquid market, offering yields of 10% to 15% per year for works valued at over $15,000. Unfortunately many of the investors I speak to have to be reminded that we are a young market compared to the rest of the world. Art investing/collecting is a long term mind set, you must remind yourself that if you have works or are looking to start a collection, that you are in for a good 10 -15 year hold, maybe longer, also remember at Anala Art Advisory, we strongly believe that art should be hung, appreciated and enjoyed. So I leave you with this…, don’t sell your art works for a share or stock that you can’t admire…, remember.., its easy to purchase another share, though an original art work is hard to get, harder to let go of and impossible to replace.

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