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SINGAPORE: For close to a decade, Chinese and Indian contemporary art has been setting record new prices every year.
Since 2004, prices for works by Chinese contemporary artists for example, have increased by 2,000 per cent or more, with paintings that once sold for under US$50,000 now bringing sums above US$1 million.
However, that bubble may have popped in October.
Eighty per cent of the collection at a recent Sotheby's auction of contemporary Asian art came from China and India.
At the close of the auction, 40 per cent of the pieces remained unsold - many of them by artists from these countries.
For Southeast Asian art however, sales have never been better.
Southeast Asian art is much more affordable than East Asian works - 11 per cent of the Southeast Asian works fetched more than USD$35,000 each in the Sotheby's auction, compared to a negligible 5 per cent in 2007.
Within the last three months, the average price for Southeast Asian contemporary art has gone up some 30 per cent. With the stock and property markets doing badly, and banks offering low interest rates, there has been a liquidity flush into the market, and art galleries are seeing good business.
Galleries in the region are also marketing themselves more aggressively internationally.
An artist working in Indonesia, Richard Winkler, said, "Before, it was more domestic, within certain areas. The audience was basically in Jakarta, artists were in Bali or Jogjakarta. It was within the country itself. Now, it is changing a lot, crossing all the borders all over Asia."
It is not just collectors buying the art works, many young professionals are also entering the market for the first time, seeing art as a good way to diversify their investment portfolio.
Southeast Asian art market specialist, Patricia Chen, said, "Art is not a commodity and can never be a commodity because it is not homogenous. One art work is not the same as the other. And when people homogenize this product and put it in a financial model, it is very risky.
“If you actually look at the statistics, 95 per cent of artists do not make it to the auction market. And even if they do, tastes change in auction and there is no guarantee that the art that you buy today is still going to sell in 20, 30 years time."
Fair director of ARTSingapore, Chen Shen Po, said, "There is risk in everything. Look at the stock markets. There is risk in buying stocks and bonds… A lot of the art doesn't go back to the auction house because a lot of the people who buy them are true collectors and don't want to let go."
While it is anybody's guess if investing in art will pay off, one thing is clear - market players in Southeast Asia are optimistic.
ARTSingapore 2008, the largest Asian contemporary art fair, which ends on Oct 13, expects to receive 15,000 visitors.
On display at the art fair is US$30 million worth of art works.
- CNA/yt
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