Antonio Foglia writes in to the Financial Times with some calculations that suggest art may not be the long-term generator of return that many believe it to be. Mr. Foglia ran some numbers on the Brueghel the Younger work Johnny Van Haeften recently brought to Frieze Masters:

It was bought in Antwerp for 200 florints by an ancestor of Lord Delamere in 1611. According to a calculator for old guilders I found on the internet, that should be the equivalent of $25,000 today in terms of unskilled labour hours. Not unreasonable, as this is a copy (the 14th known) by Brueghel the Son of one of his more famous Bruegel the Father’s pictures.

The asking price today is £6m, which is about $9.6m and would give a yearly annual real return of 1.49 per cent for the holding period of 402 years.

It is hard to guess what the return on more productive assets might have been over such a long period. But say it was 2 per cent, the original $25,000 would be worth $71.6m. If 2.5 per cent, $511m. Given the heavy survivorship bias encapsulated in the price of an old piece of art today, the 1.49 per cent per annum real return does not seem overly compelling. Buyers of high-flying contemporary art, beware.