Investing in Aboriginal Art

Posted by Aboriginal Art Directory | 17.04.08

The booming Australian Indigenous art market has ridden the wave of economy prosperity since the early 1990’s when the first Aboriginal artworks broke through the $10,000 ceiling. 2007 saw the first million-dollar-plus sales at auction, with Lawson~Menzies achieving a record of $1,073.600 for Emily Kame Kngwarrey’s Earth’s Creation in May, followed just two months later by the whopping $2.4M for Clifford Possum Tjapaljarri’s epic Warlugulong, sold by Sothebys to the National Gallery of Australia. In all, more than 40 records were broken for top 100 artists, and secondary art market sales increased by 30% on those of 2006. Total sales exceeded $25M of which the dominant market players, Sotheby’s and Menzies (includes Lawson~Menzies and Deutscher~Menzies), took $20M.

Buoyed by the confidence in the market Djon Mundine, Senior Curator – Contemporary Art Campbelltown Arts Centre has proposed a city based Contemporary Aboriginal Art Centre to feed off the creative talents of an urban Indigenous population of some 6,000. He believes that, "It could become the National Centre for Urban Aboriginal Arts", thereby building on the success of a number of high profile urban artists prominent amongst the sea of traditional community based painters. From an international perspective, proof that the ancient has become accepted as contemporary was celebrated in the use of Aboriginal art in the architectural and design features of the new Musee de Quay Branly which opened in Paris last year; and this will be further evidenced in Japan this year when an exhibition of 120 major works by the late Emily Kame Kngwarreye opens at the National Museum of Osaka in February, then at the National Centre of Tokyo in May. Margo Neale, Principal Advisor to the Director of the National Museum of Australia and the Indigenous Curator of the exhibition explains, "It’s the largest Australian solo show, ever to be staged outside of Australia. We will be hanging 3,800-4,000 linear metres. Professor Akira Tatehata, Director of the National Museum of Osaka has been pursuing the opportunity to have an exhibition by Emily Kngwarreye for more than 6 years in order to present her as a contemporary artist of international standing"

But what is the appeal of Aboriginal art? Brisbane Indigenous dealer and artist Michael Eather of Fireworks Gallery believes it relies of on the fact that "A broad sweep of people look at Aboriginal art, finding it representative of a unique and exciting land based dynamic that appeals on many levels. Identity is a universal theme – dealing with the feelings of how, when and where one fits in, a subject which never fails to attract attention. It emanates an aura that is quite distinct from other art forms in a market is clearly keen to know more about Indigenous culture."

A number of industry commentators behind the scenes however, believe that the current state of euphoria about the success of the Aboriginal art market is over-hyped and expect a flattening of the market as the industry adjusts to an expected global economic downturn. Some are even predicting a shakeout of many of the new dealers in the primary market who don’t have pockets deep enough to withstand it.

Veteran gallery owner and one of the industry’s most distinguished Indigenous art auction specialists Adrian Newstead believes that "The heating up of the primary market has been the result of the entry in the late 1990’s of mainstream contemporary art galleries and the movement of Aboriginal art in to the white box. With so many galleries seeking exhibitions many new community art centres have been established and all are under pressure to promote new emerging artists. He says ‘the work of many young and emerging artists is being introduced in to the market at over-inflated prices, and many art centres are inadvertently restraining the careers of the few major artists that live in their communities because their staff need to develop the careers of the many lesser and younger ones. Art Centres can have 30 to 750 individual artists on their books at any one time " Djon Mundine is supportive of the art centres, many of which he says generate up to $1 million in annual turnover. "They act like production lines, fostering the development of artistic technique, which is important in the early stages of an artist’s career ", however, he agrees with Adrian Newstead, saying that the centres should not penalize artists if they can get professionals to manage their careers more profitably. As Newstead points out, most of the very successful artists like Rover Thomas, Queenie McKenzie, Clifford Possum and Maggie Watson, all of whom have now passed on, and currently practicing artists like Dorothy Napangardi, Kathleen Petyarre and Tommy Watson and others, have worked with individual artists agents or functioned simply as independent artists, managing their affairs without the assistance of community art centres. Inspired by the phenomenal artistic and financial success of Pitjantjatjarra Elder Tommy Watson, Indigenous elders of the Irruntju community invited his dealer John Ioannou of Agathon Galleries in Melbourne and Sydney to run their art centre. Iaonnou explains "Our business model is based on returning 60% of the sale of work to the artists and assisting the community in other economically strategic ways." Ioannou takes a focused approach putting major effort into artists who he has identified as having the talent and commitment to go on to develop careers. At the same time he fosters the industry of other artists, finding outlets for their work in markets appropriate to their talents. Newstead is concerned about the hundreds of new artists that are coming into the industry every year who are being promoted by the community art centres as if all their works will all somehow prove to be highly collectable and a sound investment.

He continues: "The evidence, provided by secondary market sales since the first specialist sale in 1994, shows that a tiny proportion of Indigenous artists, just like non-indigenous artists become seriously collectable. Total sales at auction make this abundantly clear. The most successful in descending order have been Rover Thomas ($13.8m in sales), Emily Kame Kngwarreye ($13.6m), Albert Namatjira ($7.8m), Clifford Possum Tjapaltjarri ($6.7m), followed by Johnny Warangkula ($2.96m) , Mick Namarari Tjapaltjarri, ($2.8m), and Lin Onus ($2.6m). Other important artists who have sold between $1-2M are Ronnie Tjampitjinpa, Turkey Tolsen, Kaapa Tjampitjinpa, Queenie McKenzie, Tim Leura, Dorothy Napangardi, Uta Uta Jangala, Shorty Lungkata and Maggie Watson. With more than 5000 Indigenous artists listed in the Institute of Aboriginal Studies directory only 17 have generated in excess of $1M in secondary market sales including the early Papunya artists who produced works in 1971-73 that have sold at high prices due to their ethnographic and historical interest. He predicts that "Since 2000 there have been only a few isolated examples of artists who have emerged and performed spectacularly at auction. These include Tommy Watson and Paddy Bedford. However of the top 100 performing artists in the secondary market, only a quarter have sold works for more than $50,000"

Newstead predicts that the secondary market in Australia will become more conservative and elitist in its approach, emulating the Sotheby’s and Christies in New York and London. At the high end sales will be limited to just 100 works of high quality and value. These are likely to be sold in the context of Australian contemporary art rather than as a specialist area. He expects intense competition to source premium works.

"After all, the industry has only a 30 year history, so finding fresh high value important works will be a big challenge. We have already seen a certain amount of recycling of these high value paintings through the auction houses. There just aren’t that many of them."

In regard to interest from international collectors Newstead remains sanguine. He believes that the interest in Aboriginal art is principally locally driven, while also benefiting from a small pool of geographically dispersed international investors and collectors. "The internet and the ease of communication with international clients is making a difference. However the buyers are having a far greater effect on sales by value than sales by volume." An industry insider for more than 30 years he is unimpressed with the media hype and explains that most collectors of Indigenous art have a prior interest in Australia that is not linked particularly to Aboriginal art. Collecting Indigenous art is an esoteric pursuit with only a handful of genuinely interested international collectors. He cautions buyers about being overly impressed with the high prices achieved for works by a few artists. These results for a few very particular works of historical or aesthetic interest are fuelling a bubble of unfounded expectation in the performance of other lesser-known and lesser talented artists that is not going to be met." He summarizes: "Whilst like every field of collection there are traps for unwary players, serious collectors who work with good advice from specialist indigenous gallerists will find aboriginal art find a fertile area of interest. Ioannou: "The industry is at a very exciting stage. Aboriginal culture is a rich source of inspiration with some fantastic talents emerging as the artists increasingly develop their expressive talents and understand how the industry works."

Like many dealers in the industry, Newstead feels that resale royalties would not be particularly beneficial to the heath, education, and welfare of remote Indigenous artists and their communities, and if legislated would create a lot of unnecessary bureaucratic intervention. "For the most part royalties would only go to a few already successful artists earning high incomes and their families. " He says: "The legislation is motivated by the guilt of non-Indigenous Australians who have little understanding of the culture and circumstances that operate in the communities, or the realities of the art market. Most art, he says, actually decreases in value in real terms over time. The secondary market is only interested in a tiny percentage of all the art that has been produced. Up to 90% of works submitted to auction houses is rejected as nopt fitting in to their selection criteria. Auction houses average clearance rates for Aboriginal art in Australia vary between 40 and 70 % only. Sellers already pay high copyright fees to artists for the right to have their artworks reproduced for sale in auction catalogues. Resale royalties should never be seen as a substitute for enlightened government policy and strategic development of community facilities, health and education" He suggests instead, that the industry could well benefit from more generous and expanded taxation incentives for corporate and individual philanthropy in the arts. Mundine argues in favor of the royalty system, regarding it as a very small gesture to the artist from the purchaser. Mundine: "Artists in the music industry enjoy royalties, why shouldn’t artists?"

Copyright for Investing in Aboriginal Art remains with the author, Marie Geissler. The views expressed in this article do not necessarily reflect those of the Aboriginal Art Directory.

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