Mail & Guardian

Collecting antiques as an investment
Maya Fisher-French 13 Jul 2011 08:19

Antiques and collectables make headlines every day. The Chinese vase discovered in a house in London which fetched £68-million to the 18th Century Florentine Badminton cabinet which fetched upwards of $4.8-million to Picasso’s Boy with a Pipe which fetched a cool $104.1-million.

Even more “modern” collectables are fetching incredible prices: Marilyn Monroe’s Happy Birthday Mr President dress fetched close on $1.3-million on auction. John Lennon’s Steinway—complete with cigarette burns—fetched $2-million and the most expensive car—a 1957 Ferrari 250 Testarossa fetched $12.2-million. Even our own old masters artists such as Irma Stern, Alexis Preller and JH Pierneef are fetching millions on auctions both here and abroad.

History has proven that whenever the economy has been under pressure, whether or not brought on by recession, financial instability or inflation, quality scarce antiques have not only retained their worth but have continued to be in high demand.

The art and antique market, in the course of financial slumps, have tended to continue to be secure and even continued to increase in value.

With traditional investments often on the slippery slope of volatility, many people are taking advantage of investing in tangible items that cannot only be felt, touched and appreciated, but that offer a tangible investment and to top it all are exempt from capital gains tax.

In the medium to long-term, most good quality antiques and art do appreciate in value and experts, as a conservative estimate, put the minimum appreciation at about 10% a year.

There is growing support worldwide for antiques as an alternate investment option. Many believe it is not as risky as investing in the stock market and antiques usually maintain their value and appreciate with time.

If you want to know what value to attach to collecting art and antiques, just look at South Africa’s big banking groups—all of them, without exception—have large collections of art and antiques sitting in their executive suites and in their corporate collections.

Clyde Terry of Clyde on 4th Antiques, and the organiser of the National Antiques Faire said: “Corporate collectors often are the ones to drive prices up. Once they show an interest in a particular South African artist or buy up early Cape furniture or Cape silver, you can be sure it causes a flurry in the marketplace and the value of those items goes up dramatically.”

This is exactly what happened to the works of South African artists such as Tinus de Jongh, Willem Hermanus Coetzer, Sydney Carter, to name a few of those whose works now grace the corridors of corporate South Africa. In the case of Pierneef—a few years’ ago private and corporate collectors were buying up his paintings for about R50 000 to R70 000—but today the paintings are worth millions.

So, what are South Africans investing in and what makes for a good investment? Before you jump on the bandwagon, you need to understand the difference between “antiques” and “collectables”. Antiques are usually anything that is over 100-years-old and “collectables” refer to “younger” items that have become highly desirable as collector’s items.

While a painting by one of the old masters or a rare Louis XIV chair is a top-of-the-range investment that will always give a high return, there are other, more recent collecting disciplines which investors can enjoy and which will give a good return.

In antique furniture, collectors are going for the more practical items they can display in their homes, such as armoirs, military chests, dining room tables and chairs, chiffoniers and extremely decorative items. These can range in price from R5 000 to R95 000 per piece.

Collecting silverware remains one of the most popular disciplines and the trend worldwide is away from elaborate bulky pieces to smaller pieces that by their very nature make them easy to store, show and maintain with often higher values.

Some of the more popular collecting disciplines include collecting things like vinaigrettes, caddy spoons, baby’s rattles, nutmeg graters, pin cushions, Irish silver and novelty silver.

“With prices ranging from R2 000 to over R100 000 the role of a good dealer is to work with collectors to build a valuable and cherished collection,” said Terry.

Other collecting disciplines that are highly desirable and offer a good investment include books, maps, coins, stamps and military memorabilia. History is a good preserver and anything related to any particular historical period, a specific war or battle will, as time goes by, become more sought after.

Michael Prior, one of South Africa’s most respected dealers in books, maps, prints and militaria, believes there are two kinds of collectors in his field: “Those who have a special interest in a particular subject such as sporting, hunting, military, early travel books, plate books or reference books on natural history, flora and fauna. These collectors put passion before investment.

“The other type of collector is the wealthy one who collects books or other antique items for their intrinsic value. He is the one who has to have a signed first edition to add to his investment portfolio or extensive library.” Both these collectors will, in the long term, benefit greatly from their interest in antiques and collectables.

Stamps have long been known to be good investments and with the advent of the internet, with supposedly more than one million websites devoted to philately, sourcing or selling a particular stamp internationally has become as easy as a keystroke.

Stamps are perhaps one of the smallest of investments, literally speaking; they are also the most portable and there is a very robust international market.

John Keogh, of Keogh International, a professional numismatic dealer and art consultant with over 45-years’ experience who has handled, developed and sold many of the finest rare coin collections in the country and internationally believes the potential in the South African market for coins, antiques and art as alternate investments is growing by the day. “We in the industry do not regard it as ‘alternative’ at all, though.

“Good quality and carefully chosen coins or a significant artwork have proven themselves over decades as a high performing, safe and highly portable investment and store of wealth returning from a staid 25% plus to as much as a few hundred times an investment in short spans.”

Of all the collecting disciplines, art has seen the biggest returns—whether you seek out international art or opt for local artists who are becoming internationally recognised—investing in art is well worthwhile.

For younger investors, who may not like the “fuddy-duddy” image that antiques have, there are some exciting new collecting disciplines. At the National Antiques Fair in 2010 at the Sandton Convention Centre a dealer caused a stir with his Arne Jacobsen (Denmark, 1902-1971) leather “egg” chair in moulded fibreglass on a cast aluminium base. The chair, designed in 1957, fetched as much as a sought after Victorian Canterbury.

Hip and hot
The art nouveau and art deco period has become very hip and hot with decorative items all the rage and costume jewellery, vintage clothing and collectable furs attracting great interest.

Investment quality glass can span a wide range of periods and styles—from the elegance of Galle, Daum, lalique, Loetz and Tiffany to the more modern Italian Murano and the ever-popular Scandinavian glass from master craftsmen.

The perfect complement to contemporary living, glass collecting is attracting younger and more discerning new collectors who enjoy the finer things in life and who are looking for pieces with lasting appeal and worth.

South Africa, with its English, Dutch, French and German heritage, has a wealth of antiques and collectables that have been handed down from generation to generation, especially in furniture and silver. On the one hand, as a former colony we benefited from many commemorative items being commissioned (such as the Royal Doulton Loving Cup or the Boer War memorabilia) which today can ommand high prices.

On the other hand, due to our political isolation, many department stores that used to stock collectors items from Royal Doulton or Beswick had their supply chain halted and those items have become quite rare and sought after.

A revival in Afrikaner and Boer War antiques is also taking hold with many dealers scouring the Platteland to unearth long-forgotten “riempie” stools, rare yellow wood and stinkwood furniture or Boer War memorabilia.

Setting a value on antiques and collectables can be tricky and as with all commodities, it all boils down to what someone is willing to pay for an item. Starting a collection should be firstly be a labour of love and then it can develop into an investment.

The experts suggest you earmark a special line in collecting—whether it is pipes or calling cards—silver or furniture; research the subject thoroughly (which, according to most collectors, makes the investment journey that much more pleasurable) and then buy the very best that you can. Quality antiques will always maintain their value if taken care of properly. Investing in antiques is not a quick-profit, quick turnover business. You must be prepared to hold on to your investment for the medium-to-long term and see the value of your antiques appreciate.

Getting to know the various dealers who specialise in your chosen field of collecting is crucial to successful speculating in antiques. Visit antique fairs, get to know the dealers, get references and build a relationship with several of them. They are usually as passionate about their field as you are and are usually happy to impart valuable information and scout around to find that special piece for you.

Once you’ve purchased an item, keep a record of where and when you bought it and any other information you might have on the item. Get a written certification of the piece’s value and origin and keep a record of all your transactions. That, together with keeping the piece/s in optimum condition and insured, will protect your investment.

Two birds, one stone
There is no question that investing in art and antiques cannot only afford you an excellent investment option, but it also gives you the double pleasure of enjoying them at the same time. As one collector put it, “at least with my art and antique investments, I kill two birds with one stone. I use them to decorate my home or office and know that they are a solid investment.” As with all investments, putting all your eggs in one basket is never a recommendation and with art and antiques, the same applies. Most experts recommend putting about 10% to 15% of the value of your investment portfolio into art and antiques. But know that that 10% or 15% will undoubtedly give you the most pleasure.

The National Antiques and Decorative Arts Faire, which takes place at the Sandton Convention Centre from the July 15 to 17 2011 will showcase a wide range of antiques and collectables.

Dealers from all over the country will be exhibiting everything from furniture, silver, glassware, militaria, books, to jewellery, porcelain and art. The opening night event on July 14 attracts the who’s who of the collecting world, who reserve their favourite pieces. Bookings can be made through Clyde Terry on 011 482 4259