Every month you read about auction records in the papers. But how meaningful are those record prices? Do they say anything about the other sectors of the art market? In this module, we will discuss the tangible and intangible drivers of value in artworks in the primary and secondary markets: the importance of the artist, collector’s tastes, rarity, condition and more. We will take a look at appraisal concepts, such as fair market value, retail value and sales estimates and what they mean for your clients. Common risk factors that affect the value of an artwork will be examined, including forgeries and art theft.
Read the transcript
Welcome to module 2. In this module, I'm going to talk to you about the drivers of value in art, how are you going to advise your client on the purchase of a painting in terms of how much they should pay for today, or how much they're gonna be able to sell it for 10 years down the line.
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Art is a complex asset to appraise, hardly anyone really understands how it works without having spent some significant time in the art market. There are many tangible factors and also intangible factors that determine the value of an art works, which makes assessing value also very subjective. This subjectivity is often referred to as the passion premium, which by the way you also come across in real estate.
There are external factors that drive the value of an artwork such as trends in the art market, branding, and marketing by the gallery and the importance of the artists. Also, factors that are determined by the artwork itself, like the quality, the medium, and the size.
Lastly, the provenance of an artwork or being able to show that the work is authentic or that your client has titled to it can greatly affect the work of the value of a work of art. As an art adviser in order for you to adequately advise your clients, you need to have a really really excellent understanding of these factors both in a primary and in the secondary market.