Super rich bolster the market
RICS Arts and Antiques Survey Q2 2008

The super rich and international buyers are bolstering the arts and antiques industry as signs show the credit crunch is beginning to bite, says the RICS UK Arts and Antiques Survey published today (8th July 2008).

Chartered Surveyors reported no change in all lot prices in quarter two compared to quarter one1 indicating that the industry has remained relatively stable throughout this period. However, there was a stark divergence between the trends in the lower and upper price tiers. 

While prices of all lots slipped in the lower tiers, this was not the case further up the value chain, with activity in the £50,000 plus price sector remaining buoyant. 43 percent more Chartered Surveyors reported a rise than a fall in lot prices, demonstrating that the super rich are continuing to invest in unique items as an alternative to stocks and shares.

Signs of a slowdown in the market are beginning to show, particularly in the ceramics, clocks and furniture sub sectors. Performance of all lots in the lower price tiers (£1-£1,000 and £1,000 -£5,000) were more subdued. 41 percent more surveyors and 18 percent more surveyors respectively reported a fall than a rise in these tiers, as buyers in the lower end of the market begin to feel the impact of the credit crunch.

The super rich are only prepared to buy good quality items that will provide a high return in future sales. This is evident in the weakest performing sector - furniture - as 20 percent of surveyors reported a fall than a rise. In the £5000 plus price tier, 12 percent more surveyors reported a rise in furniture lots showing that buyers are prepared to pay a premium for classic quality pieces as shown in the furniture sales of Lord Sainsbury’s private collection.

This survey period has seen some big auctions take place. Prominent items from private collections have led to soaring sales in the £50,000 plus price tier. Many records have been shattered with surveyors reporting that the spending power of the super rich and overseas buyers - particularly Russians and Middle Eastern nationals - is having a positive impact on the industry.

For the second quarter running Contemporary Art was the strongest performing sub sector and has continued to outperform all other sectors. 48 percent more Chartered Surveyors reported a rise than a fall. 56 percent and 68 percent of Chartered Surveyors respectively reported a rise than a fall in the £5000-£50,000 and £50,000 plus tiers.

A life size Lucian Freud painting entitled ‘Benefits Supervisor sleeping’ sold for £17.2million2, at Dreweatts Urban Art Sale3, Nick Walker, 'Ratatouille Stencil' sold for £10,000; Adam Neate, 'Red Lips Mixed media' sold for £40,000; and Banksy’s ‘Laugh now but one day we will be in charge’ sold for £100,000 indicating that the popularity of urban art continued to prosper.

In contrast, Oil and Water Colour Paintings did not perform as well as Contemporary Art, with seven percent more Chartered Surveyors reporting a fall than a rise. However, the £5,000-£50,000 and £50,000 plus price tiers remained strong, with 35 percent of Chartered Surveyors reporting a rise than a fall in the £50,000 plus tiers.  Noticeable examples are Monet’s ‘Le basin aux nympheas’, painting which sold for £41million; and Kyffin Williams ‘A Welsh Farm’ canvas oil painting, which sold for £26,000.

The continuing rise in diamond, gold and silver prices has increased interest and pushed up prices, with Silver and Jewellery performing positively in all price tiers. 32 percent more surveyors reported a rise than a fall in the Silver sector and 24 percent of surveyors reported a rise than a fall in the Jewellery sector. Jewellery, Militaria and Silver and Contemporary Art were the only sectors that saw sentiment in all price tiers remain positive.

Surveyors’ confidence in the arts and antiques market in coming months appears to be weakening with 11 percent more surveyors expecting the number of lots offered to fall than rise, as a slowdown in house sales leads to less house clearances, reducing the number of items being offered at auction.

For quarter three, surveyor’s sentiment for demand is also waning with 25 percent more surveyors expecting a fall in demand than a rise. As house sales fall and the cost of living rises, buyers will be less likely to refurnish homes. However, as arts and antiques are collectors items, the super rich are likely to still be prepared to pay a premium for rare items.

RICS spokesman Jeremy Lamond, said:

"Investors at the top end of the market see arts and antiques as an alternative investment in this uncertain economic climate. The credit crunch has bolstered the sale price of more expensive items but has depressed the lower end of the market where liquidity is extremely tight. The cost of living is on the increase making the purchase of antiques a luxury few can afford. The situation is unlikely to improve in the near term but as long well-heeled investors remain the market will continue to feel supported."

Ends.

Notes to Editors

1 - 20 percent more Chartered Surveyors reported a rise than a fall in quarter one 2008.
2 - Lucian Freud’s, Benefits Supervisor sleeping’ sold for £17.2million on 14th May 2008. Source: Christies
3 - Dreweatts Urban Art Sale
4 - Claude Monet, sold for £40,921,250 at Christies on 24 June 2008. Source: Christies
5 -  Kyffin Williams A Welsh Farm’ Sold £26,000, Halls Fine Art, 2nd April 2008. Source: Halls Fine Art

About RICS

RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues.
RICS has 86,000 chartered members (FRICS and MRICS) and 55,000 members in other categories of membership (TechRICS, trainees and students) globally. It represents, regulates and promotes the work of these property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury). Visit www.rics.org/press

Chartered Arts and Antiques Surveyors provide comprehensive and professional advice on valuations, purchases, sale and management of antiques, fine art and collectibles.

The RICS Arts and Antiques Survey is the only one of its kind and will be published quarterly.

The RICS question on measuring Arts and Antiques price changes is as follows:
“Indicate by how much average prices have changed over the last three months.” (Answers either being – falling, the same or rising)

Balance = Proportion of surveyors reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the unadjusted balance will be 25%) and proportions are based on simple weighted averages of the three price tiers.

The weighted average balances cited for each lot type are based on equal weightings attached to each price tier, of which there are three: £1-£1000, £1000-£5000 and £5000+. 

For Further information, please contact

Shella Ali
Press Officer
RICS Communications
T: +44 (0)20 7334 3703
F: +44 (0)20 7695 3722
E: sali@rics.org

All RICS press releases can be found at www.rics.org/press