Art as an investment
Art has traditionally been an expensive world limited only to the very wealthy. However, over recent years it has become more accessible to a wider audience as information on fine art and investing has become easily available over the internet.
Why invest in art?
Individuals are buying art not only to beautify their homes, but increasingly to diversify their investment portfolios.
A tangible asset, art demonstrates stability over a longer time frame and is not subject to day-to-day volatility like many other investments. Since 1993, the Australian art market has expanded at a rate of 10% compound annually and despite the market volatility and instability that typified 2008 and 2009, it has shown some resilience in the face of the global economic conditions.
It also offers investors an ethical choice where they can support social and cultural values whilst also deriving personal pleasure from the art itself.
Art versus other popular alternative investments
With good advice and a selection of quality artworks, art can outperform other assets and therefore deserves to be a serious investment consideration. All you need is the right art advisor to understand your art portfolio objectives and find the best artworks to fit.
We employ a "portfolio driven" approach to artwork selection for investing purposes. This method applies the same principals you would use for any investment:
- - set your objectives
- - consider your timing (both when to buy and how long to hold)
- - review the risk/reward position of the artist
- - select mediums and images that are more likely to generate returns
Over the short to medium term (the last 3 years), art selected using these techniques has proved less volatile than overall art and still outperformed other popular assets such as property (even after accounting for potentially higher exit costs from art).*
Find out what factors influence the capital appreciation of artworks and how much some of our client's art has increased in value recently here.
Learn more about how to build an art portfolio.
Benefit from regular rental returns of up to 8% p.a.
You can see how well the art market performs in terms of mid to long term appreciation of artworks, but there is more to our art investment proposal than purely the capital appreciation aspect.
Any astute investor will be looking for his investments to produce a regular yield and this asset is no different.
We offer a highly competitive return on investment of up to 8% p.a. (fixed for two years) or 6% (fixed for 3 years) through renting the artwork out to corporate clients and organisations. Particularly popular with owners of self-managed super funds, this allows you to enjoy a healthy income from your asset, while it is potentially appreciating in value.
To find out more about investing in the art market, request a free copy of our Guide to Art as an Investment by emailing info@smithandhall.com.au
*Note: 'Portfolio driven approach' includes works by specifically selected artists such as Charles Blackman, David Boyd , Fred Cress, Ray Crooke, Adam Cullen, Cherry Hood, Josie Petrick Kemarre, Emily Kame Kngwarreye, Kuddiji Kngwarreye, David Larwill, Euan Macleod, Tim Maguire, Ngoia Pollard, Walangkura Napanangka, Judy Watson Napangardi, Lily Kelly Napangardi, Mitjilli Naparrula, Ningura Naparrula, Sidney Nolan, Naata Nungurrayi, John Olsen, Kathleen Petyarre, Evelyn Pultara, Minnie Pwerle, Ben Quilty, Garry Shead, Tim Storrier, Rover Thomas, Ronnie Tjampitjinpa, George Tjungurrayi, Willy Tjungarrayi and Brett Whiteley. Artists record prices are omitted as a conservative measure. Four quarter rolling average used to reduce seasonality of Auction cycle. 'Art' includes all artists in our database. Exit costs for art assumed at 17% seller's commission excluding GST. Source: Australian Art Sales Digest, Smith & Hall analysis. 'Sydney Property' is the median published by the ABS. Exit costs assumed at 2.5% real estate agent commission.
