In today’s post, we will look at the history of investing in art. While this is a new phenomenon for many, the concept of art as an investment has been around for over 50 years, and thanks to a half-century history of market resilience, both the short and long term performance of contemporary art remains extremely strong…

With a global market of $1.7 trillion, art is a profitable investment that consistently outperforms other asset classes. Its low volatility and ability to hedge against inflation mean that over the past decade, contemporary art has become a top choice for investors looking to diversify their portfolios. However, buying contemporary art as an investment is not a new idea. In fact, interest in art as an asset class dates back to the late 1960s. In this article, we introduce the evolution map of art as an emotional investment from its inception to today, presenting more than half a century of solid returns.

1970: Art as Investment

The idea of ​​”art as an investment” dates back to the late 1960s. and early 70’s. The director of Sotheby’s London Art Business Master’s David Bellingham reportedly stated that in deciding the defining factor of the art market in the 1970s, “it will be how art has developed as an alternative investment asset.” In 1973, the collector couple Robert and Ethel Scull auctioned off their vast art collection at Sotheby’s – then known as Parke Benet. Reaching astronomical prices, many works that a decade earlier had bought for only a few hundred dollars, sold for tens of thousands of dollars. For example, Robert Scull bought Robert Rauschenberg’s Thaw (1958) for $900, and it went under the hammer for $85,000. Sculla’s high rate of return attracted the attention of artists and connoisseurs alike, and highlighted the potential of contemporary art as a wealth asset.

1980: Globalization

The 80’s. have been dominated by international consumerism and glut. The bull market of the decade also extended to the arts industry, with collectors buying works of art at prices that gave them goosebumps. Changes in tax laws, combined with the influx of wealthy Japanese investors, meant that international money began to flow into the collectors’ sector, stimulating the art market and driving up prices. By the end of the decade, auction houses had solidified their role as clear market influencers, forging global partnerships that broadened their reach and increased awareness of the growing value of works of art.

Today: Digitization and the boom of buyers

Under the influence of the pandemic, there has been a movement towards further digitization of the art world, which has attracted new buyers around the world. In the last few years, auction houses have also turned to online sales to increase the number of transactions. In 2021 alone, Sotheby’s online sales increased by $275 million. However, even though the effects of the pandemic appear to be diminishing, according to the 2021 Art Basel & UBS report, 94% of surveyed auction houses expect online sales to grow even more over the next five years.

In the last two years there has been a new influx of wealthy collectors – individual clients who want to invest in art for the first time. Last year, 44% of all bidders at Sotheby’s auctions were new buyers, and 50% of all buyers at Phillips online and live auctions were first-time buyers, up from 32% in 2019.

The future of art as an investment

Over the past fifty years, the landscape of the art market has completely changed. However, history has consistently proven that the art market has always been and will always be both resilient and ever-expanding.. As digitalization progresses and new buyers enter the market, we look forward to a fascinating future and endless possibilities for contemporary art as an emotional investment.

If you are interested in investing in art, please contact Galeria 3U10 at 500 419 251 or at gallery@3u10.pl to receive professional investment advice.