- The wealthy’s appetite for artworks has been growing over the years as most seek to spruce up their homes with rare pieces or buy to resale, but it is gradually dropping.
The super-rich bought fewer artworks, compared to rare whisky, wine, classic cars, coins, and jewellery, a new wealth report has shown.
The wealthy’s appetite for artworks has been growing over the years as most seek to spruce up their homes with rare pieces or buy to resale, but it is gradually dropping.
“The art market did not fare quite so well, dropping 11 percent in 2020. The problem was compounded by the slowing in the supply of quality works as consigners who could afford to wait preferred to sit it out at home,” noted the Knight Frank Wealth Report.
While traditional collectors’ tastes have been driven by art history, newer collectors are opting for what is trending on social media, and this shift has contributed to a drop in auction sales and prices.
Kioko Mwitiki, a sculptor and owner of Kioko Art Gallery in Nairobi says, last year, the auction market struggled due to declined footfall in galleries, an occurrence seen globally.
“There has been a strong appreciation of African art because it has come of age, and with so, the auctions were doing well pre-Covid times,” Mr Mwitiki says.
“However, with the reduced footfall, artists tend to lower prices and through this the art market is affected directly. There was some buying under the carpet though as people took advantage of the lower prices,” he adds.
The market, the artist says, witnessed a strong preference from primary collectors who helped push up the artwork sales, and young artists who were able to sell online.
The Kenyan art market has grown thanks to developers making homes with fitted furnishings, the boom in the construction industry, establishments of fancy restaurants, and millennial interior designers.
In a landscape of stocks, bonds, government securities, and real estate, Mr Mwitiki says the artworks are turning to be an investment option for some Kenyans.
Local pieces that can be regarded as investment range from Sh500,000 to Sh1 million. This can go up to Sh2 million - Sh5 million for an entire collection of an artist, or bulk buying.
“However, we need more curators and valueers for people to know they own something of value,” Mr Mwitiki added.
According to Knight Frank, the changes seen globally included a shift towards private sales at major auction houses and a drop in the volume of collectible items by even close to half compared to the previous year.
In the Wealth report, handbags, especially designer bags - the Hermes, formed the largest chunk of luxury investment by the super-rich last year, retaining its position as an asset class since 2019. Fine wine made to the second position of the top investments. The wine markets recorded a growth of 13 percent that the report attributed to consolidation in the US winery business.
Super Tuscans - that include old vintages such as Castello Banfi Centine Toscana 2005, Antinori Tignanello Toscana 2004 and Tenuta Sette Ponti Crognolo Toscana 2004 – saw an annual growth of 18 percent.
Back vintages of Champagne gained by 14 percent while Burgundy was up by 11.5 percent.
“More than ever, this year has been about timing in the capital markets and, if you got that wrong, then chances are you got it expensively wrong. Not so for wine. Unlike after the global financial crisis, the wine market has held its nerve, merchants did not mark down prices and the market has been stable. Investors are about, and even Bordeaux prices feel like they are firming up,” it said.
Rare whisky formed the 10th position in the luxury investments rank for the year with prices dropping by 3.5 percent. This was attributed to the dip in values of the market leader, The Macallan.
Despite this, Bonhams whiskey auction specialising in the sale of old, rare, and collectible whisky achieved a record-breaking Sh87.2 million ($795,000) for a bottle of Yamazaki 55-year-old Japanese whiskey.