The art of investment

Ben Plumbly from Art + Object gallery, between works by Colin McCahon (left) and Bill Hammond. Photo / Doug Sherring

New Zealand's art world is thriving, with buyers defying the recession to spend hundreds of thousands of dollars on high-end works.

One auction house, Art + Object, enjoyed turnover of more than $1.7 million at an auction last week - including two works selling for more than $200,000 - and others are enjoying similar success.

Experts say the sales may be a sign of a recovering economy.

"There was a sense of overall relief because with all the gloom and doom and with no one really knowing what's happening with the economy, we were pretty nervous," says Art + Object's Ben Plumbly.

Bill Hammond's signature bird people feature in his haunting 1997 work Flag, which went for an impressive $255,500, topping Colin McCahon's Waterfall, which sold for $239,500.

Bidding was fierce for Tony Fomison's ghoulish Detail for a Dancing Skeleton, which went for above its $90,000 -$130,000 estimate at $133,450. Prices exclude the buyer's premiums.

"Right when the economy is seemingly at a low point, the art market is stronger than I've known it in a few years," says Plumbly.

His theory is that the art market acts like a "portent" of the wider economic market. "When the economy was booming in 2004, 2005 and 2006, the art market was flat, and now the economy is flat the art market is quite strong."

The vendor of the Hammond piece, an Auckland collector who didn't want to be named, bought Flag in 1997 for around $20,000. He was very pleased with last week's sale. "It was a very fair price in these times. It's a beautiful work that I sold. I'll miss it a lot but it was time to move on."

Because Hammonds come up rarely at auction, he was fairly confident it would sell, and believes investing in "quality" art is a relatively safe option in these times.

Another of McCahon's Waterfall series featured in Webb's important works of art auction last Monday and sold well above its estimate. The smaller Waterfall - of which there are about 90 - was at auction for $40,000-$60,000 but sold for $70,000.

Another of the series was last week at the centre of an authenticity controversy when it sold at a Dunbar Sloane auction for $50,000, despite art experts questioning whether it was really the work of McCahon. The great painter's Black White French Bay achieved $162,500 at Webb's.

"We were really surprised at just how buoyant it was," says Emma Fox, head of fine art at Webb's. "We had a full room and we had lots of registered interest and lots of phone bidders. We got some surprisingly good prices."

Because art is so personal, it's much more than just an investment, says Fox, and is therefore not so affected by economic changes. "I think buying art makes a lot of people really happy. It's something that they can see and touch and feel on the wall. It's quite a cerebral kind of investment."

Art at the lower end of the market also sold well for Webb's, with Pat Hanly's Golden Age Runner topping its estimate at $22,000, Michael Illingworth's Hillside selling for $10,700, and Shane Cotton's highly contested Mangatoroto going for $8750.

The International Art Centre's important, early and rare auction last Tuesday also went against the grain, with total sales just under $900,000.

Many works went well above their estimates, with two Goldie works selling for $72,000 and $44,500 - the latter against a reserve of just $25,000. A Frances Hodgkins watercolour blew its $18,000-$26,000 estimate out of the water, selling for $46,000. Contemporary works did just as well, with Ralph Hotere's Polaris selling for $50,000.

Gow Langsford Gallery owner John Gow says the private sector of the art world has been "ticking along nicely" as well.

"Art is a tangible asset ... and there aren't many things out there like that. You can have it, enjoy it, take a long-term view on it and then sometime in the future realise on it - and if you've bought a good painting and the artist does well, then you'll probably do financially well out of it, too.

"I think it's that comfort level that people can get having their money in something they can actually look at and completely control. You haven't got some prat flushing it down the toilet on your behalf."