Sales of art and other luxury products have surged in the first months of 2020 as the coronavirus pushes investors to change what they are buying, according to a report by luxury auctioneer Sotheby’s.
Equities and commodities have fallen drastically since the coronavirus pandemic, officially known as COVID-19, continues its spread around the world. The US S&P 500 Index ended a historic 11-year run of rising prices earlier this month, entering a bear market – referring to when the market contracts 20 percent or more from its peak. In these circumstances, art offers an alternate asset which can provide a store of value when normal assets are struggling.
“Art, in particular, can be a good investment during a crisis, as it typically sees low levels of volatility. However, it is seen as a relatively long-term investment with additional costs such as storage, which is usually more expensive than holding gold,” said Dr Ryan Lemand, senior executive officer and board director of ADS Investment Solutions (ADSI).
Sotheby’s reported that its online sales in 2020 have been “especially robust” so far, with around $20 million raised as of March 20, compared to $80 million for all of 2019.
“We have held more than a dozen auctions since the beginning of March, which have achieved very strong results and demonstrated the resilience of the global art market … It is clear that our clients remain focused on our markets and our aim to continue to support them in both buying and selling,” said Sotheby’s CEO Charles Stewart.
The uptick in online sales at Sotheby’s may be linked to numerous social distancing practices and policies that governments and authorities have put in place to combat the spread of the coronavirus as those under lockdown look for a form of escapism. Borders have been closed, businesses told to go home, and people warned not to socialize.
“Art has for centuries been a form of engagement as well as a means of escape, and against the backdrop of these extraordinary circumstances, the global art market is so far proving its resilience,” said Sotheby’s Middle East & India Chairman Edward Gibbs.
The deadly coronavirus has continued to spread, with little end to the crisis in sight. Globally, over 664,000 people have been infected, with nearly 31,000 dead. Just over 140,000 have recovered.