Appreciation of art over time

What is the appreciation of art over time?

The appreciation of art over time is simply how the value of a work you have at home grows. It is not a return guaranteed like that on a savings account, but the way a price develops according to demand, the artist's name and the mood of the market. It answers the question of how much more a painting might be worth in a few years than what you paid for it.

How does it work?

As a rough guide, an ordinary annual return runs at around 6 to 8 per cent. With proven blue chip names — the most sought-after artists — it tends to be higher, roughly 10 to 20 per cent. Exceptionally, if you pick the right name at the right moment, it can be a jump of tens or even hundreds of per cent. But always with risk, and over a longer horizon.

Why does it matter to a collector or investor?

Because this is what decides whether art will make financial sense as well as give pleasure. Anyone who understands how value develops can gauge what to expect from a purchase and will not be seduced by promises of getting rich quickly. And isn't it rather nice to know that the thing giving you pleasure on the wall is quietly working for your wallet in the meantime?

What should you watch out for?

The percentages given are indicative, not guaranteed. Behind every return stands risk and a longer horizon, because art sells less readily than shares and its price is also affected by fashion and taste. Jumps of tens or hundreds of per cent are the exception, not the rule, so it pays to count on sober figures and on the fact that value can fall as well as rise.

— Anna Pulkertová, founder of Art Part Club