The value of works of art can be extremely volatile, rising and falling on the popularity, or even, mortality of the artist.
Even rumours about who may be collecting a certain artist’s works can increase the value of other pieces by the same artist.
Tracey Emin’s My Bed, which sold last week for a world record price for the artist of £2.5 million, shot to fame when this piece was originally bought by Charles Saatchi in 2000. Saatchi’s interest in the artist’s work was deemed to be an important endorsement which attracted other collectors to buying her work.
Similarly Damien Hirst was another of the group who became known as the Young British Artists in the 1990s and came to the attention of Charles Saatchi. In 1991 Saatchi commissioned his famous tiger shark preserved in formaldehyde bizarrely titled The Physical Impossibility of Death in the Mind of Someone Living and four years later sold it for a reported multi million pound profit.
In the 21st century, the traditional collector of major art is being replaced by rich buyers treating art as an investment. The vast sums paid for works by major artists show the volatility of the market.
Earlier this year, Christie’s auctioned Francis Bacon’s 1966 Portrait of George Dyer Talking with a £30 million estimate. This powerful depiction of the artist’s lover sitting nude on a bar stool sold to an undisclosed American buyer for £42.2 million. Five years ago this painting had been bought by a Mexican financier for $12 million.
The art world’s emergence as territory for short-term speculators is highlighted by so called “flippers,” who engage in cut-and-run deals in the price crazy market for emerging artists.
The traditional world of collecting seems an age away when artists such as 24-year-old New York-based Lucien Smith can earn a small fortune using a fire extinguisher to spray canvasses with thousands of droplets of paint.
Two years ago you could buy one of his “Rain” paintings for $10,000. In a February auction, Phillips put a £60,000 estimate for a 2012 work by Smith titled Feet in the Water. Six telephone bids pushed the final sales price of the painting to £194,500.
While the super rich have sent prices in the art world sky high, it is worth remembering values can fall as well as rise dramatically. It would be a brave investor who put his faith in art works at the top of the market continuing their rapid rise in value.
Changing trends are not the only route to falling prices. The jailing of Rolf Harris for child sex offences has seen the value of his art plummet to perhaps 10 per cent of its recent value with some art pundits believing it may never recover.
Auction houses will not want to catalogue it, collectors will not want to be associated with it and public institutions and galleries will not want to display it. While Harris was a reasonable artist, much of the value of his work was attributed to its content being friendly, fun and positive, and also the artist’s popularity as a TV star and entertainer. Recent events will have left many collectors nursing serious losses on their investment which may never recover.
Bizarrely one event that often increases the value of an artist’s work is their death. Not only is this caused by a future lack of supply of more art but also a nostalgic reaction. But it is doubtful if even this will have the desired effect with Rolf Harris’ work.
* Trevor Law is a director with Merito Financial Services, chartered financial planners, based in Solihull. E-mail: email@example.com