The younger generation dives into the art market

Visitors to the annual Galleries Art Fair 2020 view works by visual artist Julian Opie. (Korea Gallery Association)

Appreciating art in galleries and exhibitions is pure bliss for Jeong Hye-young, a 35-year-old office worker in Seoul, not only because it takes her mind off her stressful work life, but also because she sees how the works increase. value.

“I don’t think art is just for the rich. After I started buying paintings, I feel like I know more about the artists and really appreciate the artworks,” said Jeong, who collects paintings by contemporary artists including Oh Chi. -gyun, best known for his hand-painted “digital works”.

“Rising price value of paintings is also an attractive factor for art collection, which can be seen as an investment, not just a subject for appreciation,” Jeong said.

Jeong is one of a growing number of people, especially those in their 20s and 30s, who are investing in art.

At an auction held on March 23, local auctioneer Seoul Auction sold 95 percent of the 146 paintings, prints and sculptures on offer. Together, they went for 10.4 billion won ($9.2 million).

“Many of the bidders participating in the auction were people in their 20s and 30s,” the auction company said, declining to give numbers, citing personal information protections.

The growing interest in art investment is part of a new golden age for the South Korean art market, which went through a long period of depression after its previous peak between 2005 and 2007.

Artworks by Korean masters, including the late Kim Tschang-yeul, are reaching new heights in value in light of soaring demand, according to a recent report by art appraisal firm Korea Art Authentication & Appraisal Research Center.

In major Asian markets, art investment is gaining momentum due to extremely low interest rates and high liquidity.

A report by investment bank UBS in early March showed art broker Sotheby’s had strong sales in Asia in 2020, with auctions reaching $932 million. Compared to people in other age groups, millennials were more willing to shop online at higher prices.

Of the 2,569 wealthy collectors around the world surveyed for the report, 56% belonged to the “MZ generation”, made up of people born between the early 1980s and the early 2000s. They spent an average of $228,000 on buy artwork and 30% have spent over $1 million.

The growing popularity of art investment can be attributed to online platforms that facilitate online auctions and new types of art investment such as co-sharing or fractional investment. stocks, according to market watchers. But investors are drawn to art, rather than stocks or cryptocurrency, as it raises hopes of stable financial returns.

“Investing in real estate requires a lump sum of money while cryptocurrency is very risky,” said Song Ja-ho, CEO of art co-sharing platform operator Pica Project. “These young collectors seem to think that art is something special because they can own it and enjoy it and profit financially from it,” he added.

People find interest in investing in art in Korea because it is sort of tax-free. Artwork purchases for 60 million won or less are exempt from tax. For works whose price exceeds 60 million, a 20% tax is only imposed on 10% of the sale price. Transactions involving works by living artists are not subject to any tax.

The painting by South Korean contemporary artist Park Seo-bo,

South Korean contemporary artist Park Seo-bo’s painting “Scripture No. 030707” is up for sale at Seoul Auction’s latest art auction last week in Seoul. The masterpiece sold for 105 million won ($92,700) at the event. (Seoul Auction)

Art, symbolized

Through the Pica Project platform, people can jointly own an expensive masterpiece for as little as 10,000 won. After being exhibited in a gallery run by the company for a period of time, the artwork is then sold at a premium and the profits are divided proportionally among the investors.

Young art collectors are also venturing to invest in non-fungible tokens – digital assets that can contain drawings, animated GIFs and songs. NFTs have swept through the conventional art industry as well as the cryptocurrency markets, and some token paintings have sold for millions of dollars. “Missing and Found,” an NFT-based digital artwork featuring a big-eyed girl with heavy makeup created by Korean artist Mari Kim, sold for 607 million won in a sale at Project Pica auction this month. The digital image, which had a starting price of 50 million won, was paid for in Ethereum, a type of cryptocurrency also known as Bitcoin. The buyer is assumed to be a young, tech-savvy art investor.

While the growing interest in art is good for the industry, some market watchers say first-time art collectors should first try to develop an eye for great pieces through thorough research and analysis. watching news and trends.

“Beginner buyers should think twice before making the decision to collect artwork, and they should not be easily swayed by other people’s opinions when choosing an artwork,” Yoon Bo said. -hyung, lawyer and author of an art collecting guide titled “I Choose Artwork Over Chanel Bags.

“If you’re not sure whether or not to buy a certain piece of art, do more research and find something that makes you feel ‘this is it…this is mine,'” he said. she adds.

By Kim Young-won ([email protected])

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