The numbers coming out of Australia in reaction to the proposed ban on using art and other collectibles as investment vehicles for private pensions–the so-called super funds–are truly startling. The Sydney Morning Herald now estimates that the majority of the Aboriginal art market is consumed by art investors:
Up to 60 per cent of Aboriginal art is bought through self-managed super funds, according to managing director of Melbourne-based Moss Green Auctions Paul Sumner. Banning art investments from super would be a ”massive disincentive” to buyers, he said. ”The removal of [art] as an investment asset class will devastate, in particular, Aboriginal art, because 60 per cent of the people who collect Aboriginal art invest through their super fund.” Aboriginal art was particularly attractive to self-managed super funds because there was a global market for it.
If these numbers are correct, they suggest the Australian art market is dangerously built upon the idea of art as an investment. If the majority of the works were bought and sold for other reasons, investing in art could have merits but when the bulk of sales are based upon expectations of asset appreciation, you pretty much have the definition of a vulnerable bubble.
Super Proposal ‘Could Devastate’ Aboriginal Art (Sydney Morning Herald)