If you ask me who knows best which economy is booming, I would certainly say art dealers.
When people become rich, they start to get interested in artworks and antiques. Some buy them as investment, some acquire them for appreciation, others want them as status symbol.
What makes artworks and antiques stand out when compared with gold, stocks or properties is that they cannot be mass produced, they are all unique.
The rule of thumb for successful collectors is always go for the best, as long as you have the money.
Works of mediocre quality do not have much room for price appreciation because there are so many of them.
“There is always someone who needs some money and wants to sell them quickly,” a dealer told this writer.
But if you have a piece of top quality by a famous artist, there will be no competing offers, and the price typically spirals up over the years.
In an auction at Christie’s last May, the hammer came down for Picasso’s “Les femmes d’Alger” (Version O) at US$160 million, setting a new world record.
Dealers are often among the first to smell where the big money is, because for rare pieces, the whole world of riches will compete for them.
“When the Japanese economy was booming in the ’80s, they were my main customers,” the dealer said. “These days, the big spenders are no doubt mainland Chinese.”
Another dealer said: “Local customers are always negotiating the prices, but mainlanders just snap them up. They are so rich they don’t bother to haggle.
“Sometimes, you can find their bids double the level seen in Hong Kong. Of course, I prefer to sell to the best offer.”
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CG