More money than sense

The Celtic Tiger boom has seen an explosion in the sale of art as Irish people have become gripLast year a Louis le Brocquy watercolour sold at a Sotheby's auction in London for the equivalent of €230,000 – ten times more than expected and far more than many deemed it to be worth. Irish auctioneer John deVere White had another le Brocquy watercolour hanging on the wall of his Dublin auction house. It was the same size, the same year and in his own words “an infinitely better painting”.ped by ‘auctionmania'.

DeVere White rang up the Northern Irish dealer who he knew had been the under-bidder in the London auction. He offered the dealer's client the second watercolour for 40 per cent less than what he had been willing to pay at auction. But the under-bidder wasn't interested. He said he'd had a rush of blood to the head at the auction.
Back in the slower-paced world of considered buying and selling, he wasn't interested in paying considerably less money for a considerably better picture.
DeVere White calls this “auctionmania” – a trend that is obscuring the notion of value for money in the current Irish art market.  

“There's no doubt at all at the moment, there's so much money around, that there is auctionmania,” he said. “You couldn't identify auctionmania. I mean auctionmania, especially in these boom times, is a serious factor at sales. I'd say at any sale at the moment, if you offered 50 per cent of the under-bidders the twin of the picture they bid on the next day, they wouldn't be interested.”

This percentage may seem sensational but deVere Art Auctions have offered an identical painting to the under-bidder on three separate occasions and every time they were refused.

This is a major obstacle in defining value for money when buying or selling art. If you have two buyers rich enough to be unaffected by the notion of paying €229,048 for a painting valued at €22,369, then the whole idea of value for money goes out the window. When it comes to defining value in the art world, it's generally how much someone is willing to pay for it rather than what it's worth because most people regularly buying art at auction have no interest in, or need for, value for money.

There is a general consensus that the art market tends to follow the property market and that when houses sell well, art is only a year or two behind. When the Irish art market first took off, many were of the opinion that, in relation to the wealth of the country, both property and art were undervalued. And while to say so would be detrimental to the careers of many in the art business, there is an unspoken belief that much of our art is once again on a par with the overvalued property in Ireland.

In its own market and on its own scale, art inflation is as relevant a factor as property inflation.
Last year was the highest grossing for the Irish art market to date and Ireland's leading auction houses are saying that the figures for this year so far already suggest that 2007 will usurp 2006. The number of first time buyers, as well as the amount of money that the average lot is making, is also on the rise.

DeVere White says that most current buyers are not necessarily passionate about art but rather they have the houses, the blank walls and the money. This reinforces the ability of value for money to be determined by the amount people are willing to spend rather than the worth of the work.

Currently the art market shows no signs of slowing down but eventually everything must come to an end. DeVere White says that he would now be advising people to be sellers rather than buyers. He has more people coming to him with art to sell than ever before. “They're thinking: ‘maybe now is the time to cash in. The market's so strong maybe we should cash in it and we could help children put a deposit on a flat.' There's far more pictures of reasonable quality coming onto the market than there were in the past few years because I think now there are definitely buyers out there and the prices are tempting people to sell,” he said.

Last month Ireland's three major auctions had 1,000 pieces on offer. All three auctions did very well and found buyers for most of the work – be they people with a passion or investors.

Investing in art is a growing phenomenon but it can prove difficult to really profit from. Those with a real passion for the craft often buy a painting with the intention of selling it on at a profit- but once on their wall the picture gets far too comfortable. Those able to detach themselves from the aesthetic nature of art in order to view it only as an investment can buy and sell easier, but are more likely to get it wrong. And if they do then they aren't even left with a picture they enjoy to console them. However the risks that come along with art investments are low, as almost all art will be bought with surplus cash and not credit card or bank drafts. Tax breaks available to art buyers who lend or gift the work to a gallery can also make investing more attractive. But to view art as an investment could prove harmful to its original aesthetic value. Oscar Wilde once described a cynic as someone who knows the price of everything but the value of nothing. Could that lead to the suggestion that the booming Irish art market is just a little overvalued and just a little cynical?π