Exert from Stephan Hundt Quarterly Review 2012
Head: SPI Art Advisory Service
.... For the serious art collector, the recognition of South
African artistís worth, exemplified by the record
prices achieved in places in the last two years,
despite economic contraction and recession, is but
the cherry on the cake in terms of recognition of the
underlying pool of talent and quality of vision that this
country continues to foster.
There is little doubt art has become a seriously
investible commodity that should enjoy the same
serious consideration as any other investment-grade
asset class. In a recent Financial Times article, art
was identified alongside prime property as a relative
safe haven for international money. The Mei Moses
World Art Index reported that investment-grade art
grew 10.2% in value in 2011, outperforming both the
S&P 500 and the FTSE All Share total return indices.
South Africa is nothing like Europe or the United
States in history or scale when it comes to art, and
these reports, although encouraging, are not
necessarily reflective of what is going on here.
Nevertheless, they do provide a backdrop against
which the expanding South African art market can
be viewed as credible and growing.
.... The Citadel Art Price Index may present a bleak
picture to buyers who only seek monetary return on
their art investment. The downward trend appears
overall and for those that bought at the top end of the
previous auction season this appears pessimistic. A
closer look at what sold or not would present a more
sobering picture; investors would perhaps find some
encouragement if they retained their focus on quality
rather than follow the herd of speculators as it
rumbles along seemingly desperate to see new
record prices ....
.... Every artwork is unique and in this respect art cannot
be compared to many of the other investment asset
classes in the investment universe, other than
perhaps prime real estate. Artworks do provide
benefits to the owner. Although these may be difficult
to quantify they are clearly tangible and often
outweigh monetary considerations. A world without
art would be impossible to contemplate and it is rare
that even the most humble home doesnít have some
aspiration to have artworks on the wall.
Whether you are a serious collector, or only able to
afford a limited amount towards acquiring an artwork,
an informed choice is what differentiates between the
piece which remains exemplary of the popular taste
of the day and that which transcends its origins to be
a meaningful experience for a viewer in time to come.
The art market is not without its fashion episodes and
marketing stratagems which may inflate prices beyond
expectations. Thorough research and expert insight
provide the tool that makes for better choices when
buying art, and thus changing what would have been
a sentimental decoration into an investment with
significant meaning ...
African Leader Dec 2004
extracts from 'mind/shift Jan 2006/issue O2
Despite huge potential, the culture of buying art as an investment in South Africa is very limited. Words: Beezy Bailey
Extremely mediocre art and posters are to be found on the wall of multinational business and in the homes of most South African millionaire businessmen.
.....With property and stocks at a premium, what to do with spare cash for good returns is becoming a subject of much consideration.
.....I continue to buy while values increase, in most cases dramatically. A R4,000 Vusi Nkumalo I bought in l996 is now worth R50,000. I have not has the experience of anything I bought devaluing.
People and businesses in South Africa who could afford original Picassos hanging on the wall are likely to spend more on curtains than paintings.
I applaud the redressing of the past in buying black art, but feel that excluding paintings by white South African to be rather racist and definitely unconstitutional...
... It thus falls to us, the artists, the arts community and big business to educate South Africans to understand that art is fundamental to our development. People need educating as to the value of any investment, be it property, share or art. It would be interesting to see how much a diamond has increased in value over the same period of time as Picasso. My guess is that art would win every time! Art bought as speculation would create the right market to allow market forces to drive prices up, thus creating the same viable art industry as in all other Western countries.
extract from articles by Simpiwe Piliso - 2006
High-fliers splash out on works of art
Corporate executives spend millions on their collections
....Art dealers this week estimated that buyers were spending from as little as R500 to as much as R1million for a single painting to hang in their homes and offices. "Some people buy art for investment purposes and others buy it to decorate their homes", said Alice Pitzer, who owns a gallery in Roodepoort, west of Joburg. She said Joburg boasted the country's largest number of classic art buyers...
Art is the new blue chip
Art is big business in Joburg - and the city's super-rich are splashing out millions on works to hand in their homes.
"The growing number of art buyers have bought their luxury houses and expensive cars ... and now they want to put nice this into these houses".
Art dealers this week estimated that the value of private and corporate collections in the city could amount to more than R2-billion.
Dealer Alice Pitzer said her list of corporate clients was overwhelming. "Most importantly, art is excluded (from) capital gains tax and therefore is a very attractive investment".
Art auctions in the city in the last two years have attracted record turnouts. And at one a fortnight ago, an astonishing 14 records were broken, according to auctioneer Stephan Welz.
"There's a lot of money floating around" ... One Joburg bidder spent R1.4 million on a painting by South African artist Pieter Hugo Naude.
The painting, "Springtime Namaqualand" sold in l988 for R70,000.
Another painting that left the Rosebank aution floor was Irma Stern's "A Still Life with Arum Lilies" which fetched over R1-million ...
Bina Genovese, an art dealer at Sephan Welz & Co, said one of the highest prices fetched in Joburg was R1.7 million for Stern's Cape Girl with Fruit, seven years ago. Welz predicted art could fetch eight-figure amounts in South Africa within seven years.
extract from Sunday Times, February 1 2004 by Shanthini Naidoo
Investors develop an eye for SA art
Paintings by established South African artists double in value as buyers swop the stock market for aesthetics
Forget stocks and bonds - the clever money right now is on South African paintings.
Investors and art lovers are clamouring for works by established artists because they see them as sure-fire winners - and because the art does not depreciate.
The demand is driving up the prices of paintings, with some having doubled in value in just a year.
... "People are always looking for other investment opportunities an d they've only now, much belatedly, realized that good South Afrcan art is a great investment", said Wessels.
She said buyers ranged from avid collectors to first- timers.
... Michael Bernardi, of Bernardi Auctioneers, said well-known artists were fetching "exceptional" prices.
... "The market is buoyant and it always will be for good-quality artworks by South African masters,"Bernardi said.
Cape Town fine art gallery owner Johans Borman said buying quality South African art was a safe investment because it was not as volatile as shares.
The bigger picture
Works by SA artists are set to break new records.....
.......The global art market is even more superheated.† In November last
year mida mogul David Geffen sold a Jackson Pollock to David Martinez, a
managing partner with debt management Fintech Advisory, for a
record-setting US$140m.† Other abstract work by Gustav Klimt and Willem de
Koonong fetched similar prices a few months earlier.
Though such results tend to made the prices paid in SA seem polite, these
headlines sales are not without import locally.† The Laubser sale might
represent a record at auction, but it is at private sales that new peaks are
being mapped and scaled.† Locally, a buyer recently concluded a R5m private
sale for a work by Gerard Sekoto.† While such sales are indicative of a
buoyant local art economy, they also suggest a disturbing trend for some
"I would never have dreamt the Laubser would have fetched R4, or R4,4 with
the buyer's premium added, and even less so the Stern gouache," Welz
admits.† "The jump was slightly disturbing; it was just too big".
It is a view shared by Cape Town dealer Michael Stevenson, who is now
dealing almost exclusively in contemporary SA art.
"At present it is difficult to trade with integrity in the market", he says,
"because the values are so difficult to determine......Once some clarity
appears on the relative values, I will be more active".
In a market that is fundamentally irrational (Welz characterises it as
"based on perceptions and fashion"), such clarity might still be far off -
or just around the corner..........
Like Stevenson, Welz does, however, concede that the depth and wealth of the
market locally makes it hard to predict.† "There is a new generation of
collectors coming into the market," says Weltz, "who are willing to chase up
prices on significant works."† Both warn that lots of money does not
necessarily buy quality........
Welz agrees, diplomatically offering this bit of advice to unschooled trophy
hunters: "As a rule of thumb, when the crunch comes and you have to sell,
you are always going to do better with a good painting by a lesser artist
than with a bad painting by a major artist".
Viewed more broadly, the acquisition of trophy art has long been a pursuit
of individuals marking their arrival at the pinnacle of society.† The recent
conflation of collecting to mean clever investing indicates a disingenuous
new spin on this time-honoured ritual.. Like so many who work with art as a
daily routine, Welz is emphatic in his repudiation of this trend.† "Art is
not a investment," he states.† "To my mind, it doesn't meet the criteria of
the definition of an investment:† it doesn't pay a dividend, in fact it
costs you money to keep it; and it is not easily transactable.† I prefer to
call it a form of wealth".
Extract from an article by Sean O'Toole from the Financial Mail February 9 2007