Arts and antiques supply shortage pushes prices higher
Prices in the arts and antiques market continue to rise owing to a lack of supply, with prices at the lower end of the market generally outperforming the higher end says the latest survey from RICS (Royal Institution of Chartered Surveyors).
The All Lot price balance, which provides a snapshot of the overall market, continued to edge up in the first quarter of 2010, with 22 percent more surveyors reporting rising rather than falling prices, up from 17 percent in the previous quarter. The lower end of the market is outperforming the higher end, but there are notable exceptions at the high end such as the oil and watercolour categories. Indeed, in the £1- £1,000 and £1,000-£5,000 categories, the All Lot net balances were a positive 24 and 27 percent respectively. This compares with the £5,000-£50,000 and the £50,000 plus categories, which both recorded All Lot net balances of a positive 18 percent.
Silver and jewellery remain strong sectors with 57 percent and 41 percent of surveyors reporting rising rather than falling prices in these categories respectively. These are traditionally seen as safe havens for investors, but their continuing strength can be also attributed to the high scrappage value of precious metals.
However, signs of a recovery in the contemporary art market proved short lived. The balance of surveyors reporting falling rather than rising prices fell back to -1 percent from a positive six percent last quarter, the only sector to experience an overall negative reading.
In the top end of the market, the oil and watercolour subsector performed particularly well. For lots over £50,000, 45 percent more surveyors recorded rising rather than falling prices, up from 17 percent in the previous quarter. In contrast, the balance at the top end was only 10 percent for contemporary arts, indicating that traditional pieces remain more popular for high-end buyers.
Looking ahead, surveyors expect demand to outstrip supply. The expected demand net balance was a positive 48 percent compared to an expected supply net balance of 29 percent
Simon Rubinsohn, RICS chief economist said: "Last quarter's improvement in the contemporary art market turned out to be the result of the Frieze art fair last October rather than a solid turnaround. However, the arts and antiques market remains a strong performer as an asset class with prices rising in nearly all categories.
"The lack of supply will continue to push prices up as long as transaction levels remain low in the housing market. The weather has had an impact on quality lots coming to auction but with many bids conducted by phone and via the internet there has been little impact on demand."