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May 17--Ahead of their inaugural Middle East sale of contemporary art -- to be staged in Dubai at the Jumeirah Emirates Towers Hotel on May 24th -- Christie's, the world's leading auction house, has today dispensed with valuable 'trade secrets', offering potential buyers advice on making investments in the art market.
The venerable British auction house has historically been reluctant to tout the financial advantages that can be reaped from buying works of art -- the age old phrase, 'buy art with your heart' is an auctioneer's standard retort -- but, with the explosion in areas such as the contemporary Indian art market, and a recent Christie's New York sale of Post-War and Contemporary Art grossing a staggering $143,187,200, it is undeniable that art can potentially make for a very sound investment.
Whilst recent months have witnessed an unprecedented level of turbulence on both global and UAE stock exchanges, the art market has maintained its composure. Indeed, stealthy buyers have been purchasing art for centuries and stories continue to appear in the press of objects bought for a few hundred dollars realising a value years later of a few thousand, or even, in some cases, a few million dollars.
"There is undoubtedly an inherent ability of great art works to maintain their appeal in financial as well as aesthetic terms over the years, decades and centuries," said Paul Hewitt, International Business Development Manager, Christie's.
"Recent studies of repeat sales have reflected that, with the right advice, art can make for an extremely good investment. However, at auction, we always advise you to bid for what you love, what you can live with and what you will enjoy regardless of its return-on-investment," Hewitt continued.
Funds have recently been created throughout the world with the specific purpose of buying art as an investment. This renewed interest has catalyzed the production of several academic studies which demonstrate trends in art prices, comparing them with other investments. According to a report by Professors Mei and Moses, the value of masterpiece sales under performs when compared to contemporary art auctions.
However, as Christie's record-breaking $82.5 million sale of Van Gogh's 'Dr. Gachet' in 1990 proved, timing is crucial and it is widely agreed that the portrait fetched such a high sum due, in part at least, to the Van Gough 'craze' which was sweeping across Japan at the time. Similarly, another portrait by Van Gogh -- this time of Adeline Ravoux -- also changed hands during the late 1980s. It was first sold by Christie's in 1966 when it made 150,000 guineas (approx. $400,000); it appeared again in 1988 when it sold for $13,750,000.
Nevertheless, despite having an estimated worth of $20 billion per annum, there is no global tracking system in place for the art market and analysis is therefore limited:
Hewitt continued, "Studying auction prices gives only a partial insight into the art Market and it is difficult to make exact conclusions as works of art are unique and therefore defy the kinds of precise statistical scrutiny that normally dictate investment in other areas."
"Those seeking to buy art with an eye to investment should therefore seek the advice of an expert in order to become conscious of the factors that cause some works to be of greater value than others. The art market is also by no means a single homogenous entity, moreover it is a conglomeration of a series of distinct markets, each developing at an individual rate.
"This suggests that diversification might be the key to wise investment and it is noticeable that buyers nowadays often collect across a wide field," Hewitt concluded.
Offering a total of 128 examples from the Arab world, Iran, India, Pakistan and the West, Christie's inaugural auction in the Middle East -- "International Modern and Contemporary Art" -- takes place at 8 o'clock on May 24th 2006 at the Jumeirah Emirates Towers Hotel, Dubai.
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