Tiding over tough times

The post-remonetisation recovery of India has revealed that any suggestion of gloom was premature, and those who want their art will not be swayed to any major extent by such measures. But if the pessimism was ephemeral, there still remain questions that need to be answered, especially pertaining to GST, which will have its bearing on the art market, too. Will the limit be set at 28 per cent, as is being anticipated by some? Or will it be lower, in keeping with something that is creative and handmade rather than what is being touted as a “luxury” product? No one knows yet, other than the finance minister and his council, but it makes the present environment short of the imposition of a uniform GST particularly attractive for those who want to “invest” in building their collection ahead of the currently notional tax. 

Is this the right time to buy art? Punters believe so, and on that account there is more activity and interest in acquiring art than in the immediate wake of demonetisation, though that hump — the negative sentiment at that time notwithstanding — was soon overcome. The recent Pundole’s auction did particularly well, and sentiments seem to be turning positive, even as buyers continue to look for bargains. 

A word that has entered the art lexicon in recent times is “right pricing”. How do you determine what the right price is for a work that will have experts divided in their opinion? While pricing is a belief of rarity and quality, benchmarks — at least for the better known artists — are determined by auction houses that publish their results, thereby putting values out in the public space, something galleries refrain from doing. Of course, auction prices can be erratic, but taken over an average, are reasonably good indicators of value. They can at least help to right-price an artist’s work, though it does not hold in the primary market where, unlike in the secondary market, there are no standards to help determine an artist’s price. 

But, on a generalisation, art prices do appreciate over time, sometimes remarkably so. The more startling ones make newspaper headlines, but most see a market rise that is based on a general surge in the art market. If values sometimes fall, as they did following the financial crisis of 2008, it helps separate the established masters and their quality from those less so. But such scenarios are few; on average, the world has seen prices rise globally, even given the concern that art is a mostly illiquid asset. 

Therefore, right pricing becomes a critical aspect of art buying. Like real estate, some of the rub-off of ownership is based on artists with a high demand, just as a peer neighbourhood is coveted. Buyers are willing to pay a higher price for this, and this is unlikely to change, even though longevity and the ability to stay relevant is an important aspect of purchasing art. While some of this may be speculative, art also has the ability to breach such considerations on the basis of aesthetics. Unlike other investments, it is meant to be enjoyed and to create conversations. There are few assets with such upsides.

In time, though, even higher taxes will not matter too much because ownership of art has to do with passion, which price cannot scale down. And where there are passionate collectors, there will be hard-nosed investors. In that scenario, right pricing is about demand more than it is about supply. And the growing appetite for art in a country of 1.2 billion can hardly be denied. An upsurge awaits around the corner. 

 

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Kishore Singh is a Delhi-based writer and art critic. These views are personal and do not reflect those of the organisation with which he is associated