(By Nalini S Malaviya)
There is no denying that the art market is currently going though a period of recession, correction or adjustment, as various analysts put it. In its recent art market review, Sotheby’s points out that the combined result for the two weeks of sales at Sotheby's and Christie's was $775,747,825. It goes on to say that despite the economic recession, buyers have spent a huge amount on art. The results also indicate that ‘rare and spectacular’ works were sold at the Impressionist and Modern art sales, while there was ‘target buying for exceptional works’ at the Contemporary art sales. According to the auction house, Sotheby’s the results ‘display confidence in an eventual return to the longer-term trend of rising prices’. This will sound promising to investors who have bought art as a long term investment.
In the context of Indian art, investors would have noticed that while prices of Modern artists have remained more or less at previous levels, prices for Contemporary artists have come down substantially. The trend however is not unforeseen. Modern artists have been exhibiting their works for years and have established a niche for themselves. They are backed by a proven track record and consistent performance at domestic and international auctions. Their demand has been quite constant in the primary as well as secondary market over the years. However, one should note that now the overall demand for art itself has come down. This again is expected as most investors have been going through a liquidity crisis. The ArtTactic report on the Indian art market, which came out earlier this month, also indicates a drop in confidence from October 2007 and May 2008 to now.
On the whole, investors will now be extremely quality conscious and will look out for exceptional works from both Modern and Contemporary artists.
(Pubished in Financial Times)