_Investments of passion in Australia - Art and Whisky
Passion play
When it comes to investments of passion in Australia, art is the most collected asset class, according to our research. It is also currently setting the pace in terms of price growth if recent auction sales are anything to go by.
At its Important Australian Art sale in August, Sotheby’s Australia hammered works worth in total over AU$12 million, a record sum. Records were achieved for three artists: William Dobell, Peter Booth and Cressida Campbell.
The top seller was Mountain Creek, Mount Kosciusko by Fred Williams. Estimated to make between AU$800,000 and AU$1.2 million, the oil on canvas work eventually sold for AU$1.7 million.
Earlier in the year, Seafood Paella also set a record for John Olsen, often referred to as Australia’s greatest living artist. The six-metre oil panel was sold for just over AU$1 million by Sotheby’s Australia in April, more than doubling the artist’s previous record.
“Over the past several years, it has been immensely pleasing to see the artists we champion receive the recognition they deserve, with commercial results increasingly reflecting the depth of artistic merit Australia has to offer,” says Geoffrey Smith, Chairman of Sotheby’s Australia.
“Indeed, we are seeing stronger engagement from our clients than ever and our results are reflecting this demand – with record prices being achieved regularly for both long established and contemporary artists,” he adds.
However, while prices have risen strongly, a detailed analysis by Art Market Research (AMR) shows the market is still some way from its peak.
“An index of 14 of the best performing Australian 20th Century artists reveals a much more mixed picture,” explains AMR’s Sebastian Duthy. “Average values are now half their peak in 2012 after changes in Australian government regulations, including artist resale rights and pension fund rules, had a negative impact on prices.
“But as this year’s auction results suggest prices are showing recovery at the top end of the market. The average value of the index is up 95% from 2015, which was the lowest point since 2007,” points out Mr Duthy.
Interest in Australian art, however, is not restricted to works being snapped up by private collectors, explains Owen Craven, Senior Curator at UAP – a global public art and design firm.
“Australian art is so exciting right now. With the advent of the art fair over the past decade, our galleries and artists have been afforded exposure to the global market and this has pushed artists’ boundaries into the global context.
“It’s hard to pinpoint any one artist but Lindy Lee is an artist whose practice is gaining global recognition. We are proud to be delivering public commissions with her in cities around the globe including Shanghai and New York.”
Image: Mountain Creek, Mount Kosciusko by Fred Williams Image courtesy of Sotheby’s Australia © ESTATE OF FRED WILLIAMS/COPYRIGHT AGENCY, 2019
Raise a glass
While it is whisky collectors based in Singapore, China and Hong Kong who are really setting the pace when it comes to the very top of the market in the Asia-Pacific region – a bottle of 60-year-old Macallan made the equivalent of almost AU$1.5 million when it was auctioned in Hong Kong last year – demand is also increasing sharply in Australia, says Maighdlin Gold, brand ambassador for The Glenlivet.
“Scotch Whisky is hugely popular in Australia – it is the largest spirits category in the country with 23% of overall value share. And while blended whisky still dominates, accounting for 83% of the overall value share, single malts are driving the growth with volumes almost doubling over the past three years.
“The Glenlivet is the second most sought after single malt in the country, and with the return of The Glenlivet 12 year-old, the demand is growing. We are also experiencing growth in rare and limited whiskies with higher age statements as well as a demand for locally distilled craft batched whiskies.”
Younger aficionados are also helping to drive innovation in the industry, observes Ms Gold.
"We are seeing more young people than ever delving into whisky, and rejecting that common misconception that whisky is an old man’s drink for a cold night."
“When we look at where younger consumers are experiencing whisky, that’s where we see the key differences emerging. The experimentation that’s happening in Australia’s bar scene is phenomenal, and it’s changing the way young people are consuming whisky and, by proxy, it’s changing their tastes.”
Image: The Glenlivet 15 years of age
For aspiring Scotch investors Ms Gold suggests combining rarity with age is a great starting point.
“Scotland has around forty ‘ghost distilleries’. These are distilleries that have closed their doors, but whose casks of whisky continue to age. For instance, Caperdonich is no longer producing spirit, meaning their stocks are dwindling. Every time a bottle is opened, the remaining bottles become significantly rarer.
“The Glenlivet released The Winchester Collection, which is comprised of three single malts that have been resting in our cellars for fifty years. The 1964 edition was laid down by Captain William Smith Grant, the last distilling descendant of The Glenlivet’s founder. It is an extremely limited release, with only one hundred bottles available and it provides an incredible tangible link to the distillery’s rich history.”
Rarity could also boost the demand for a “home-grown” Australian investment of passion. The imminent closure of the Argyle mine in Western Australia, which produces many of the world’s pink diamonds, may help support price growth. Pink diamonds already outperform blue and yellow stones, according to the Fancy Color Research Foundation, which provides data for the Knight Frank Luxury Investment Index.