Art market prices are expected to appreciate by 40% over the next 24 months, according to Castlestone Management, the global asset manager specialising in providing alternative assets for clients.
“When the value of money falls, the value of assets rise – whether it’s art or gold,” says CEO Angus Murray.
Much the same is true of South Africa’s art market.
In November last year a South African painting – a still life by Irma Stern – broke the R1m barrier for the first time in terms of the price paid for a local painting.
More recently, another Stern work – Still Life with Gladioli
– was sold at an auction for R7.57m, setting a new record for South African art.
With that comes growing demand from art collectors and other investors who see art as good diversification in a portfolio.
But at the same time, growing local art collections require specialised insurance. “Specialised underwriting managers in this field – such as Artinsure, with whom we place our commercial and personal fine art book – will tell you prices are determined by among other factors the nature of the piece, the size of the collection and the risk management applied to protect the item or items,” said Mandy Barrett, a manager at insurance brokers Glenrand MIB.
She adds while art risk was historically placed internationally, an increasing amount of risk is now being written in SA, helping to contain insurance premiums.