That insight played a huge role in altering the mindsets of buyers and collectors, and also in changing the dynamics of the art market significantly. Buyers realised they could make a quick buck by buying and selling in quick succession, which was amply aided by the booming economy. This trend lasted till the recent recessionary period, when it became clear that just as any other market which had grown too fast too soon there were huge gaps in infrastructure and systems.
In the meantime, it had become fashionable to collect art or to be seen as a patron of the fine arts, and again, the fast-growing economy acted as a catalyst in supporting luxurious lifestyles. Art was a conversation piece and adorned the homes of all those who could afford it.
Then there was a phase where there were a number of art funds in the market catering to a clientele that was not interested in art, but only in the dividends that it could offer. However, the recent economic downturn has been an eye-opener of sorts, in many ways.
There was abundant disappointment and disillusionment, especially for those who had entered the business of buying and selling art without understanding either the art or the dynamics of the market. But it may have contributed towards a more aware and knowledgeable collector and investor base, and overall, in the establishment of a more mature market. Today, loyal collectors are continuing to buy art with a renewed focus on quality. There are a few investors in the field.
They are treading cautiously and short-term investors are wary of making the same mistakes again. The young, upwardly mobile professional is still interested but not completely convinced or confident. For all practical purposes this continues to be a transition phase and the next few months where activities will increase may help in determining how the situation unfolds.
(Published in Financial Times)