The Australian takes stock of the Australian art market on the eve of their auction cycle:
Credit: David Geraghty
The Melbourne accountant declines to put a dollar value on his collection; nor does he think of his artworks as an investment portfolio, despite a professional inclination to do so. “It’s about putting together something that has meaning, something that has aesthetics and beauty, and something that gives you enjoyment,” he says.
Two years ago when the art boom peaked, the value of Roe’s collection skyrocketed. He has some excellent examples of work by artists such as John Coburn, Tony Tuckson, Ian Fairweather, Ginger Riley, Rover Thomas and Bill Whiskey Tjapaltjarri, and these paintings would have been worth many thousands of dollars more than he originally paid.
But the paintings weren’t for sale and no fortune was made.
Roe describes his collection as an asset that produces a negative income. “The lost income I identify as the appeal collectors like myself get out of the work. It hangs on our walls, it doesn’t earn anything for us, and that’s the way you have to look at it. You’d never do this (collect) purely for investment purposes. If you do, you’ll be sorely disappointed and the investment will be an abject failure.”
He adds, however, that “one can say with confidence that if they have built a broad-based collection over the medium to long term, then they can be confident of 7 per cent growth per annum”.
After that caveat, the article goes on to extoll the virtues and opportunities of the Australian art market:
“The number of people who are truly dedicated and passionately and intelligently collecting art has increased significantly,” he says. “Sure, they might be a little bit more subdued, but they won’t go away, they are still involved, and there are hundreds of them.”
The financial risks associated with entering the Australian art market are also considerably less for collectors in the US, Britain and Europe. “A 20 per cent hit you might take on a painting you bought in New York two years ago for $8m is a hell of a lot worse than the 20per cent hit you take if you paid $60,000 for a Rick Amor in a Melbourne gallery,” Sydney art dealer Denis Savill says.
But the economic downturn presents serious challenges to the industry. Ailing consumer confidence has deeply affected vendors and there is a critical shortage of stock.
“During the boom years the phones just kept ringing with people offering us paintings,” says Lesley Alway, Sotheby’s managing director. “From a staff point of view, we are now saying: ‘The phone is not ringing, you have to get out there and talk to people, use your contacts and make these consignments happen.’ It’s a very tough environment.”
Tim Goodman, chief executive of auctioneers Bonhams and Goodman, agrees: “No one’s selling anything. People have the perception that now is a bad time to sell, but in fact, because there’s so little stock around, anything that is quality and with a half-decent estimate is flying.”
Art adviser Jon Dwyer suspects many collectors are nervous about the public exposure that comes with a high-profile auction. Only last week he brokered private deals for six paintings that fetched between $10,000 and $150,000.
