Why some investors prefer art over real estate as the real estate market heats up

Artist Tania Blanchard had just finished building a new home studio when COVID-19 hit and, as the economy plunged into recession, she began to feel nervous.

“I was really worried that I would not be busy and that people wouldn’t be able to afford art,” Ms. Blanchard said.

But his concerns were short-lived.

With people spending more time at home, embarking on renovations and unable to book vacations abroad, she has witnessed a COVID-inspired renaissance.

Cashed-in art lovers opened their pandemic purses and started spending big.

“Suddenly I got very busy,” Ms. Blanchard said.

“It was a really crazy time.”

Singer Amy Shark recently purchased a painting by Tania Blanchard.(

Provided: Tania Blanchard

)

Ms. Blanchard has seen a significant increase in the number of valuable commission requests.

“The commissions I was doing… most of them were great works of art,” she said.

“People were prepared to spend this money.

Picasso or real estate?

A man holds an art auction in front of a crowd of people.
Charles Ninow, head of art at Webb’s auction house, says there has been a dramatic increase in art sales. (

Provided: Charles Ninow

)

According to New Zealand auction house Webb’s, a growing number of investors are choosing art over real estate, as the real estate market continues to soar.

Artistic director Charles Ninow said buyers are increasingly looking for alternative investment opportunities.

He said art sales at Webb’s have doubled in recent months as people look to diversify.

“I think people can see the real estate market is insanely hot, I think they can see the equity market is incredibly hot,” he said.

“We have dramatically increased the number of deals we do.”

A man makes a bid for a work of art at an auction.
Auction houses say there has been a resurgence of interest in art. (

Provided: Charles Ninow

)

Mr Ninow said that while the art market has not kept pace with the steep rise in house prices over the past 50 years, it is not too far away and remains an attractive option. for investors.

“If you invest in the stock market and invest in Bitcoin, something like that, you are really betting on an idea and if that market goes down, the money is gone,” he said.

“You don’t have to pay tax on it when you resell it and the prices don’t go down for art.

“What other things can you buy that gives you a cultural experience, something that you enjoy and that also gains value – I mean, it’s pretty unique. ”

“The great art appreciates”

A painting in an art gallery.
Smith & Singer recently sold Fred Williams’ painting Guthega Landscape (1975) for $ 1.2 million.(

Supplied: Smith & Singer

)

Smith & Singer auction house, formerly known as Sotheby’s, regularly holds art auctions in Melbourne and Sydney and has also seen a spike in activity.

CEO Gary Singer said the travel restrictions meant art lovers had money to spend on other interests.

“People are engaging with us more than they were before COVID,” Singer said.

“They’re willing to make a commitment because they don’t spend the money on other things like travel, eat so much, and shop as much.”

Mr Singer said the majority of his buyers were motivated by a personal or emotional connection to works of art, rather than a particular asset class.

“It’s a by-product of their passion and interest because great art appreciates,” he said.

“People really need to be interested in it, decide to buy it, take care of it and enjoy it while they wait.”

He said that people who buy important works of art usually have other investments as well.

“They just decide to buy maybe an investment or something that makes them happy, at the same time.”

The new gallery attracts huge crowds

Bright and multicolored building.
The $ 60.5 million HOTA gallery is now Australia’s largest regional art gallery. (

Provided: HOTA

)

Australia’s newest arts destination is the $ 60.5 million HOTA gallery on the Gold Coast.

Since opening four weeks ago, it has attracted an impressive number of customers.

CEO Criena Gerkhe said 28,000 people have visited the gallery since it opened on May 8.

“There is no doubt that we are hitting beyond what we expected,” said Ms Gerhke.

“So there is definitely something in the air.

“People thirst for this connection with arts and culture.

“People have been locked up, you know, and they haven’t had a chance to have that human connection.”

A woman stands in front of a graffiti wall, with artwork in the foreground.
Burleigh Heads artist Tania Blanchard with works from her latest series, Gravitation.(

Provided: Tania Blanchard

)

For artist Tania Blanchard, it’s a connection that transcends state and international borders.

“I sell a lot of my artwork interstate and internationally,” Ms. Blanchard said.

“I have just sold two paintings in Barcelona and have just received an order for someone in Germany.

“It’s an absolute blessing, I don’t take it for granted for a second. I love what I do.”


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