Art Dollars in a Time of Uncertainty

Bangulzai SG

What’s a savvier investment decision in this economic climate: A masterpiece or contemporary art painting? By Ramesh William

Auctions at Sotheby’s, the world’s largest auction house, are often jaw dropping affairs. The well-heeled art buyers it attracts are known to drop more than a few dozen million without batting an eyelid—in the good old days, at least.

So last November, eyebrows were swiftly raised when a Vincent van Gogh painting drew no bids at all at a New York auction. The eye popping figure of zero bids drew gasps of breath from art observers and art experts alike.

For it was indeed a sign of the times; high-end art collectors keeping their checkbooks firmly against their breast pocket, causing the art market to plummet. But in the oft-mysterious world of art, a drop in demand doesn’t automatically mean that a drop in valuation will immediately follow. In plain English: Just because the estimated $45 million Van Gogh didn’t sell, doesn’t mean you can have it for a couple of million.

But say you have a bit of spare cash (yes, a cool couple of million will do nicely, thank you very much) lying around and you’d like to buy some art, what would be the better choice for you: Contemporary art from painters like Chinese Pop Art contemporary Feng Zhengjie and modern day renaissance men like Julian Schnabel, or masterpieces from the likes of Pablo Picasso or Henri Matisse?

Well, the jury is still out on this. According to Stephane Le Pelletier, Director of Asia-Pacific for Opera Gallery here in Singapore, it remains to be seen whether the prices of masterpieces will drop in the near run, making them an attractive target for potential newbie art investors. “There are many factors that determine the price of a masterpiece,” he says. “The main question now for masterpieces is whether demand (and price) for these works of art will contract in view of the new economic climate.”

Le Pelletier also debunks the myth that the price of masterpieces are beyond the reach of the Average Joe, pointing out that, “the price range of masterpieces vary from anything at a few thousand dollars to a six, seven figure sum.” While it may be moot to speculate by just how much masterpieces are falling (if at all) in value, the Opera Gallery director notes that now is a definitely a good time to look for rare works, with several bargains thrown in the mix. “With some collectors putting their artworks for sale at attractive prices, it’s a good time for new buyers to consider entering the market,” he adds.

While contemporary art, especially Chinese contemporary art, has been all the rage in the region in recent times, Le Pelletier offers the following advice to those still unsure which way to turn. “Masterpieces by artists like Matisse, Chagall and Picasso will always be considered the ‘blue chips’ of fine art,” he says. “Their value will always stand the test of time.

“Masterpiece paintings are conferred this title for many reasons—collectors recognize and appreciate the value of these artists, and for good reason. It is difficult to give a figure of expected appreciation, but the values of these art works usually endure all sorts of economic ups and downs.”

While contemporary art has its legions of followers, Le Pelletier feels the inherent strengths of the masterpieces instantly give them an edge over avant-garde, more contemporary rivals; the obvious edge being the rarity
of works by masterpiece painters and yes, their rather timeless quality. “Matisse is the past, while Feng Zhengjie is the present,” he says.

Another aspect to consider when buying art is to ask oneself whether it is solely for investment purposes or for an aesthetic appreciation.

“If this is purely an investment call, it would be best to be prudent and look out for the good pieces expected to flow into the market in times like this,” says Le Pelletier. “However, art without love and a sense of appreciation would be meaningless; so always buy pieces that speak to you.”

But it’s all not doom in gloom in the art world. We’ve been mostly discussing about paintings here—without pointing to the fact that contemporary artworks, be they in the form of sculptures and art installations, are seemingly recession proof and doing well. Jeff Koon’s sculpture “Stacked” was bought in 1997 for $375,000 and is now being offered a cool $4.5million for it. Meanwhile, Damien Hirst sold more than $270 million dollars worth of his “stuff” (artworks like his famous dissected sharks and cows) via Sotheby’s last year—and said that contemporary art was getting too expensive. Yeah, right.

So what do outrageous numbers like those mentioned above mean to the average punter looking for some choice investment picks or simply searching for a tasteful, classy piece for his living room wall?

Well, it means that the art market isn’t completely on its knees yet. Buying and selling aside, most are just watching, waiting and studying the market. With a host of resources online, from blogs to forums to the financial pages, you may only be a tip or two away from snagging that masterpiece or a cool contemporary for a steal. Both have their merits in the art market. So keep your eyes peeled.