Art Market History – Looking at the Big Picture
The art market correction of the early 1990′s that followed the great art market boom of the late 1980′s sparked a fear of art investment that still prevents many people from investing in art to this day. What many people don’t realise is that over the long term, fine art is in fact a very stable investment with an extremely positive history. To give you some idea of how the art market has performed in recent times I have compiled some facts and figures which are summarised below.
Contrary to popular belief, the art market does not crumble during times of stock market weakness or war, in fact fine art experienced a 256% rise in the last great bear market during the Vietnam War (1966-1975) while stocks fell 27%. Further evidence of the long term stability of the art market was revealed in an exhaustive study by NYU professors Jianping Mei and Michael Moses using figures from the 27 recessions dating all the way back to 1875 which showed that the fine art holds up very well in bad times and is a good store of value.
In 2002 Zurich Financial Services published figures showing art and antiques to be one of the most lucrative investments with their research revealing that over the previous 25 years, high-grade collections had risen in value by more than 785%. Another study which was completed in 2006 was conducted to find out more about investment opportunities in the world of art, with a focus on contemporary art. Entitled “Contemporary Art: An Asset Class for Portfolio Diversification” (Contemporary Art – eine Assetklasse zur Portfoliodiversifikation), the study was commissioned by Hamburger Art Estate AG and conducted by the F.A.Z.-Institut für Management-, Markt- und Medieninformation. The two most important conclusions from this study were:
-that art prices have been on a long-term upward trend since the second world war, resulting in returns that are comparable with shares and other investments.
-that art prices develop completely or largely independently of the stock markets or other investments such as bonds or commodities.
There is no denying the severity of the art market correction of the early 90′s but I think it is far more important to look at the big picture, especially considering that art is a long term investment.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectables for Pleasure and Profit and contributes to many other publications.