Creative Stakes

Investing in art can be great fun but treacherous. You'll need deep pockets and good know-how. Even if it doesn't make you a fortune, you'll have a beautiful object to display in your home or office

- SYLVIA WALKER

In November 2024, a banana duct-taped to a wall sold for a staggering $6.2 million at an auction in New York. Called Comedian, this conceptual work of art went viral, demonstrating that the price of art is simply what someone is willing to pay for it. But how investable is art really?

PROFIT AND PLEASURE

Investing involves making money in one of two ways. You can profit in the future by selling something for more than you paid for it, or you can earn an income from interest, dividends or rental income on a property. In some cases, the two may be combined. Art falls into the first category, allowing you to diversify your portfolio, but it is also bought for its aesthetic appeal, according to Simon Blundell, fine art and antiques appraiser. You can display and enjoy the artwork, and its value may increase over time.

PROFITABILITY FACTORS

The return on your investment is determined by factors such as the artwork, the artist, market conditions and the length of time that you own the piece. 'According to a 2024 report by Art Market Research (AMR), contemporary art has delivered an average annual return of 7.5% over the past 25 years,' says Simon, adding that returns can sometimes exceed this, particularly for high-profile pieces or those by artists whose popularity skyrockets. Stefan Hundt, curator of the Sanlam Art Collection emphasises the importance of timing. He explains that if you bought an Irma Stern in the 1970s to 1980s and sold it before 2008, you would have made a respectable return. ‘However, if you bought a Stern in the mid 2000s and are trying to sell it now, you may not be as fortunate,’ he says.

NO RECOURSE FOR BAD ADVICE