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Putting a high price on your art collection

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Art is a great investment for anyone… but you have to have a good eye for it

The work of renowned artist Alexis Preller – born and raised in Pretoria – today fetches many millions at auction. But collectors in his lifetime (he died in 1975), despite some substantial commissions and a successful exhibition track record locally, didn’t fully grasp the artist’s talent and vision.

Preller’s work showed no great investment profile until relatively recently, says Ruarc Peffers, managing director of Aspire Art Auctions. “Between his death in 1975 and a work achieving a price of R1.5m in 2008, his market had been flat.”
But an authoritative visual biography in 2010 helped to develop and grow his market, prices steadily increased, surpassing the R9m mark in October 2018 at an Aspire art auction in Johannesburg for a late work entitled Adam (1972).
European-based company Artprice runs the Price Index for the global art market and says over the last 20 years the art market has greatly increased in liquidity and “has grown to now be widely appreciated as a genuinely efficient market”.
The global art market as a whole was in fact valued at around $67.4bn (R954bn) last year. In its most successful segment, the contemporary art field, the average annual yield is +8.1%, and the average holding period for a work of contemporary art (that is, between its acquisition at an auction and its sale at another auction) is only nine years. In terms of actual investment returns, the fine art field is one of the best alternatives to traditional financial investments, says Peffers.
Alexis Preller, Adam (1972). Sold at Aspire R9 104 000. Picture: Supplied

Experts advise you to have “a relatively well-diversified art portfolio, constructed on the basis of a simple and non-aggressive acquisition strategy, with a genuine economic raison d’être, quite apart from the non-pecuniary benefits of collecting art”.
Aspire also advises you to:
  • Buy art you love.
  • Ensure it is signed by the artist.
  • Buy an original and not a print (unless it is limited edition).
  • Look out for new, fresh talent.
  • If you do buy a print run ensure it is first edition.
  • Get certificates of authenticity and/or proof of purchase.
  • Don’t leave prints rolled up. Use a reputable framer.

Preller’s work is a good example of how collecting value is developed, says Peffers. When one high price is achieved for a good example of an artist’s work, it tends to set an auction benchmark, and can lead to further high prices in a virtuous cycle for collectors, he explains.

As values for Preller began to climb, top-quality works from across his oeuvre began to find their way to market as owners became keen to capitalise on the rise in value.

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