Get the right price and value

Updated: Feb 1 2006, 05:30am hrs
Gallery Espace sold a Prabhakar Barwe, a few days ago. And even before the ink had dried on the receipt, the buyer or, should I say, investor, had offered it for sale to a few people in Mumbai. This even before the Espace show that included the work was over.

Welcome to the new world of art. Buying art has now reached frenetic levels. Art is fashionable. Some perceive it as an asset and to a large new audience, art is now a commodity that they can speculate with for greater and greater gains. What a sea change to the prevalent mood when I started Espace 16 years ago.

At a more innocent time, individuals and a few enlightened corporates, for the sheer joy of collecting and enjoying it on walls, acquired art. Prices and value mattered but were not the over-riding compulsion. Passion and merit were. Today, investment and monetary appreciation are by far the most important drivers in a large number of transactions in the art world.

A booming economy, increase in disposable incomes and multiple auction sales seem to be driving prices into stratospheric levels. Also, auctions seem to be a key cause in the increase in the buyer/collector base. While hammer bids at these events do influence the general art price index, they do not determine the final price of any particular artist. Other factors, such as the period, provenance, demand and supply, and the condition of the piece, all have to be taken into consideration when valuing an art work.

If one has to invest in art, it would be wise to classify the investment as one does with securities and shares. The three classifications are:

High risk/high return investments: this group would be the younger artists who are breaking out. Thus, one would ideally hold the works of these artists for a long period.

Medium risk/medium return investments: the young and established artists whose works have, in the past, shown a 30% to 40% increase in price. These artists should ideally show a steady increase in price going ahead.

Low risk/high-to-low return: this group would be the perennial blue-chip artists, whose reputations are firmly in place and whose value will continue to rise or hold steady.

Art has thus become a good option to put money into. Prices should continue to rise. At worst, they may reach a plateau and remain steady before resuming an upward motion. Potentially, art is as good or, perhaps, even better to invest in than stocks and real estate.

Now, let us talk of value instead of prices. There is a difference between price and value. While it is possible that the price of most works of art may increase, does the increase in value of each individual piece mirror that increase That does not happen. The value of a work of art is determined by which period of the life of an artist it is from and how it is regarded by art historians, museums and collectors.

A classic example of this is the Bengal school. The prices of the artists of the Bengal school havent gone up in relation to the prices of the artists of the Progressives. However, the Bengal school artists will always be well regarded in the history of Indian contemporary art. And the value of their works will increase. In fact, I am certain we will see this happen in the forthcoming retrospectives of Binode Bihari Mookherjee and Ramkinkar Baij.

Let us now examine the positives and negatives of the recent rise in art prices. The positives are: awareness has increased tremendously; youn-ger artists are getting attention, a platform, as well as monetary value.

On the negative side, mediocre and sub-standard art is finding an audience, too; the buyers are confused and are buying art without realising or researching the quality of what they have bought; everyone expects to reap a fortune, which is not likely to happen.

The best way, perhaps, to avoid pitfalls is to seek advice from an established gallery or even an experienced friend who knows art. One needs to educate oneself. Do this by visiting shows and reading about artists. Finally, if one follows his/her instincts, then perhaps one will gain beauty and appreciation all together in the pieces acquired.

The writer is managing director, Gallery Espace, Delhi