News Item: 00055

22nd Apr 2008

Greater investment in arts and antiques

Source: http://www.rics.org

More consumers are investing in the arts and antiques market, leading to a rise in lot prices, says RICS' first-ever Art and Antiques Survey.

The volatility of the financial markets appears to be encouraging consumers to switch to alternative investment opportunities. 20% more surveyors reported a rise than a fall in lot prices indicating that the arts and antiques market is still buoyant. 50% more Chartered Surveyors reported a rise than a fall in the performance of lots in the £5000+ band, signifying that consumers with disposable incomes are looking to purchase arts and antiques as long-term investments.

The first quarter coincides with the payout of city bonuses commonly resulting in more activity in the arts and antiques market - this year was no exception. Given the current climate, many are turning away from the financial sector and are investing in tangible goods.

However, the performance of lower price brackets- £,1000 -£5,000 lots and £1-£1,000 lots -were more subdued as only 7% and 4% more surveyors respectively reported a rise in the first quarter of 2008 - an indication that amateur enthusiasts are reining in their spending.

The rise in gold and silver prices has impacted on silver in the antiques market. Silver was the strongest performing sub sector in quarter one with 40% more Chartered Surveyors reporting a rise than a fall in silver lot prices.

Unlike all of the other sub-sectors, sentiment in the performance of silver, in all price tiers, was positively high. 14% more Chartered Surveyors reported a rise in furniture lot prices than a fall. Significantly 37% more surveyors reported a rise in furniture lots in the £5,000+ price tier.

Over the last few years demand and value for antique furniture has fallen as homeowners invested in contemporary minimalist décor. This quarter one rise can be attributed to the increase in demand from buyers as they become conscious of the good value antique furniture provides.

5% more surveyors reported a rise in picture lots than a fall, with £5,000+ lots performing particularly well - 44% more surveyors reported a rise than a fall in picture lot prices in the £5000+ price band.

Surveyors linked this to the interest in the urban art market, with painting from the likes of Banksy, Damien Hirst, Peter Doig et al all selling in excess of £10,000.

However the net price balance in the mid tier market was zero. The net price balance in the lower price band was negative at -30, indicating that prices are indeed falling in the lower price tiers within the art sector. In the ceramics sub sector, 2% more surveyors reported a rise than a fall with 25% more surveyors reporting a rise than a fall in price of lots in the £5000+ price tier.

However, surveyors were less confident about the performance of the mid and lower tiers with the net price balance for £1-£1,000 lots at -22%, indicating that prices in this band were falling due to the overall declining interest in ceramics. The weakest performing sub-sector was the clocks market.

1% more surveyors reported a fall in lot prices than a rise, showing that collectors are looking for long term investment items which they hope will attract a wider range of interest in later sales. Items such as clocks usually attract a niché group of collectors. Surveyor confidence in the arts and antiques market over the next three months remains positive with 17% more surveyors expecting lot sales to increase, whilst 32% more surveyors expect lot prices to increase.

RICS spokesman Christopher Ewbank said: "The arts and antiques market remains a viable investment option during this period of financial uncertainty. Many investors are using their disposable incomes to buy in at the high end with the hope that value will continue to stay firm while stocks and bonds ebb and flow. High salaries and large bonuses in many employment sectors have led to a high volume of new buyers entering the arts and antiques market, which has helped to push up the prices of lots. This is most evident in the arts due to the rise in popularity of 21st century art. Despite the fact that many American investors are shying away from UK auction houses due to the continuing strength of the pound compared to the dollar, the sector will continue to perform while other investment opportunities carry a higher risk."