Is art a good investment?
Art can play a diversification role, because its value partly moves independently of financial markets. But it is a very uneven market, in which only a small share of works gain value over time, with high transaction costs and a sometimes slow resale. It is better to buy a work you love and treat any gain as a bonus, not a guaranteed goal.
Art price indices quoted in the press often cover the most visible auction sales: they do not reflect the result of an average collector, and they ignore costs.
How do you value a work of art?
A work's value depends on the artist and their market standing, authenticity, condition, provenance (the history of owners), rarity and current demand. It is estimated by comparing recent sales of comparable works and by calling on an expert, an auctioneer or a specialist gallery.
Provenance and authenticity are decisive, especially for major works: certificates, the artist's catalogue raisonné, documented history of sales and exhibitions. A work without clear provenance is worth much less, or becomes unsellable. Groupe OPERA works with a network of experts to analyse these elements.
What are the hidden costs of investing in art?
When buying and selling, the commissions of auction houses or galleries can be a significant part of the price: at auction, the buyer pays a premium on top of the hammer price, and the seller pays a commission. Add insurance, storage or framing, transport, appraisal, restoration and, depending on the country, VAT, import duties and the artist's resale right.
| Item | When |
|---|---|
| Buyer's premium (auction) | On purchase, on top of the hammer price |
| Seller's commission | On resale |
| Insurance | Every year, based on the declared value |
| Storage, transport, framing | While you own the work |
| Appraisal, restoration | From time to time |
| Taxes (VAT, duties, resale right) | Depending on the country and transaction |
All in all, a work often needs to gain significant value before its resale produces a net gain.
How do you resell a work of art?
You can resell a work at auction, through a gallery, or privately, directly or through a broker. Auctions offer visibility, but the result is not guaranteed and fees are high. A private sale is more discreet and sometimes faster, but requires finding the right buyer. Either way, a resale can take months.
Art brokerage, one of Groupe OPERA's activities, consists of bringing sellers and buyers together for private sales, with the support of experts to analyse provenance and authenticity.