How can the collector decide the ‘right’ price to pay?

Confidence among investors for Indian modern art is now restored, one may say, with a series of successful auctions that indicates prices are on an upward trajectory. Speculators are also back in the fray, lured by the rising prices and increased confidence levels. The modern art is in spotlight, in particular. So how can the collector decide the ‘right’ price to pay? Art expert Kishore Singh puts forward an interesting assumption in one of his recent columns:

”If we accept that for a country of India's size, there were very few painters to begin with, and then accept the global average that only 10 per cent of an artist's work can be considered of exceptional quality, then the amount of such art is rather limited and getting scarcer as it ends up in the hands of intuitions/collections unlikely to re-sell it.”

To put things in proper perspective, here are some stats: The highest prices for Indian art were attained in 2008. In the first decade of the new millennium, the range significantly moved higher from just Rs 1 million to almost Rs 100 million. The same quality of artworks will witness the price band move further higher in the coming decade. How much is anybody’s guess?

High disposable incomes coupled with the democratization of markets led to greater appreciation of Indian art, driving up the prices. It was a combination of both hype and quality. Hysteria created was evident in the new benchmarks set in auctions. The first painting to break the Rs 10 million barrier and each successive new price benchmark created further frenzy.

Soon 'art for art's sake' gave way to the notion of 'art for investment's sake'. But that wasn’t to continue forever! Recession reined in the art market as speculators beat a hasty retreat. Now things are looking up again. And let us hope that the history won’t get repeated again. But then that’s market for you.

Long live the investor and the modern art masters!