Feb. 17, 2021

Art market in the pandemic

The year 2020 brought a crisis that affected our usual lives, a pandemic. At the same time - new records were set on the Polish and global auction market. What is a cause of it? Why are troubled times - the perfect time for alternative investments, including art?

 

 

Changes on the global and Polish art market - auction houses go online


Covid-19 has shaken the global art market: auction houses, so far focused on personal contact with customers and bidding in the auction room, had to switch to online mode. After the initial shock (which, importantly, Polish auction houses handled better than, for example, the French ones), they did it with great success. In 2020, compared to the previous year, the number of purchases at online auctions increased almost 5 times, many auction houses also successfully conducted auctions in the auction room "behind closed doors", contacting customers only by phone and via the Internet. Online events were also very popular (e.g. DESA Design Days online live broadcasts inApril organized by DESA Unicum were viewed over 20,000 times! -see more).

 

2020 - a year of significant increases in art investments

 

The year 2020 brought rising prices of works of art, esp. among the so-called Contemporary classics (the prices of contemporary art on the world market have increased by almost 7% for a year), and new to the market, young energetic investors under 40. According to the report prepared by Masterworks, art has become the fourth largest investment market after the stock exchange, gold and private equity funds.

 

Polish Art Market Boom

 

The turnover on the Polish art market in 2020 amounted to PLN 380 million, which means an increase by PLN 85 million and 29% compared to 2019. 467 auctions were held, bringing the sale of almost 22,000 items. It is worth noting that as much as 51.6% of the Polish art market share belonged to the DESA Unicum auction house (see more).

During the autumn and winter auctions records were broken many times, both at early art auctions with nearly PLN 4.5 million for a painting by Tamara Łempicka  "Czytająca I", as well as contemporary art with record sales of Wojciech Fangor's "M22" for over PLN 7.3 million (see more). There was also great interest in the very dynamic market segment - Young Art and photography - with a record for the work of Steve McCurry's "Afghan Girl"

"The best Polish artists in relation to similar artists in the international arena are still very underestimated, and per capita expenses are still many times lower than in Western European countries. If we look at how the Polish art market grows, it also grows much faster than in other countries and offers the prospect of further dynamic growth "

– says Juliusz Windorbski, president of DESA Unicum.

 

 

What makes art such an appealing investment?

  • A beautiful and unique investment

By investing in art, we not only receive an investment, but also a valuable and one-of-a-kind item, the beauty of which we can enjoy and which will become a great element of interior design.

  • A work of art - a value in itself

Investors increasingly appreciate the uniqueness of works of art. Contrary to, for example, actions, paintings, sculptures, graphics or photography - they are objects with their own artistic value. It gives collectors the feeling that they are patrons of culture and artists.

  • Works of art as an alternative to investment deposits

As noticed by Juliusz Windorbski, if we look at how the prices of some artists are rising, we see a huge interest not only among collectors, but also investors, who increasingly treat works of art not only as a collector's item, but also an important investment asset with a potential growth much greater than real estate or other investment alternatives. With the fall in interest rates on deposits, investors are turning away from traditional forms of saving, looking for safe alternative investments, which is reflected in the art market. You could even say that the more the interest rates drop, the more valuable the works of art become!

  • Art more valuable than gold? Literally!

It would seem that gold is the investment with the highest rate of return. Meanwhile - as the data shows - the average annual rate of return for the last 25 years for gold was 6.5%, while for contemporary art as much as 13.6%, which is twice as much!

  • Stable market

Contrary to other methods, investments in works of art are relatively safe: they do not have fluctuations such as stocks or even gold over the past years. In addition, the increasing popularity of the art market provides certainty of profit.

  • Global investment

The art market is international in nature, which is an additional advantage for collectors. When you buy a painting, sculpture or graphic art in one country, you can most often sell it in another. Due to the fact that the art market has been moved online, its availability for new investors has significantly increased, as confirmed by the Masterworks report.

 

 

Beware of fake deals and uncertain source

 

However, there are pitfalls for novice investors, whose number has increased significantly recently. Fake deals and counterfeits. That is why it is so important to buy paintings, sculptures and other valuable items from a reliable source, confirmed by expert opinion.

The DESA Unicum Auction House employs over 80 best specialists in all areas of art in Poland: from painting, graphics and sculpture, through jewelery and artistic craftsmanship, to the latest media - installations, comics, photography and street art. Thanks to them, the client can be sure that they are buying a good quality work - the right object for investment.