Investments of passion driven by art
China now dominates the world art market, according to the latest Asia Pacific Wealth Report 2012. Many categories of art are classified as "Investments of Passion" and have done very well, outperforming equities since the last global financial and economic crisis.
Art and jewellery are now often an important part of your average Asia Pacific’s High Net Worth Individual’s portfolio. This has led to strong growth in art funds, with independent adviser Artvest valuing the art funds industry at US$700 million to US$750m globally last year, with Asia Pacific accounting for about a third of that.
China and Hong Kong have overtaken the US as the world’s biggest art buyers, with artifacts of cultural interest appealing to them in particular. This is pushing up the value of indigenous works, which saw a 20.6 per cent jump in the World Traditional Chinese Works of Art Index last year.
Asia Pacific is now a high-end art market, with 12 per cent of artworks in the region selling from between US$100,000 and US$1m in 2011, versus 2.2 per cent in the rest of the world. The levels of revenue per sale put the East above North America and Europe, even though their sales are bigger in terms of volume. China only accounted for 11 per cent of art sales by volume last year, compared with 15 per cent in the US and 16 per cent in France, but in revenue terms, China’s art market is worth double that of Europe. China’s market seems to be going gangbusters, having posted 774 auction sales of more than US$1m last year, compared to a paltry 377 in the UK and 426 in the US.
Investments of Passion Driven by Women
Asia Pacific is also emerging as a growing market for pricey cars, with China and India driving the growth in sales. And a large percentage of these are being bought, and driven by, women.
Of the 300 Porsches sold in Singapore in the first half of 2011, a third were bought by women. As were one in three of the Maseratis and one in five of the Ferraris sold in China. Bentley’s export sales to China doubled to 1,839 cars last year, a year on year growth of 95 per cent. Boats are high on the China millionaire’s wish list too, according to a 2011 survey by China’s equivalent of the Forbes Rich List, the Hurun Report, which reported that more than half of China’s 875, 000 millionaires want to buy a boat.
India’s luxury car market is also bounding along, with growth of 40 per cent annually, Even long waiting periods for delivery of prized cars are not discouraging buyers: The Lamborghini Aventador costs US$796,000 in India, but has a waiting list of 18 months, with 20 orders.
Fine and rare watches also catch the Asian investor’s eye. Sotheby’s Hong Kong’s 2011 sales of Important Watches netted US$7.1m. The auction was 80 per cent sold by lot and 86 per cent by value, making it the auction houses’ highest ever total for such a sale.