'Israel is a microcosm for the art market'

Knowing what art to invest in is never simple. Tastes change, trends end and the players in the international markets shift.

“Art defies the types of precise statistical analysis found in other financial market assets,” Jay Vincze, the international director of Christie’s auction house in London, said Thursday at the second annual ArtFi conference in Tel Aviv’s Habima Theater. “Just when you think you understand a part of it, the world changes, the art changes and you know longer understand.”

Despite it’s relatively small place in the art world, Israel has become somewhat of a crystal ball for international sales.

“We see the Israeli market as a seismograph of what will happen in the US and Europe,” said Sigal Mordechai, managing director of Sotheby’s Israel.

“It’s the same thing but on a smaller scale.”

Somehow or another, she said, the art sales that happen here each December have become excellent predictors of the trends in London’s February auctions.

Not merely an expensive fixture for the wall, art is an asset in which collectors, businesses and corporations invest. According to the experts at ArtFi, the state of the financial art market is growing.

“Art has long been seen as a very stable store of value,” Vincze said, noting that sales in recent years have broken records. “Traditionally, art has also been seen as offering very handsome returns.”

Despite the difficulties of pinning down the next big thing (and setting aside the hints Israel’s auctions may offer), several trends have emerged in the art market recently. One of them is the growing importance of Internet sales, which is broadening the base of buyers. At Christie’s, online sales accounted for a fifth of the business in 2012. Of those that participated in the online auctions, 39 percent were new buyers.

“People are comfortable spending significant amounts of money without seeing the work in the flesh,” Vincze said.

Not only is the Internet making the buyers’ market more accessible, but the growth of emerging markets is globalizing the art market.

“A lot of the art we’re selling now is finding its way to places where we have traditionally not done business,” Vincze said.

Russian buyers made a serious entry to the market five years ago, and Asian clients represented about a fifth of registered bidders for Christie’s. Their tastes and cultural influences will take on broader significance in shaping the market.

Paired with recovering financial markets, the broader demand is pushing art prices upward. But today’s first-time buyers are expected to also become sellers in 10 to 15 years, meaning the international art markets will only deepen.

Israel is playing a small but important role in those markets.

According to Sotheby’s, the only international auction house that has a dedicated focus of Israeli art, Israelis are becoming dedicated international art collectors.

“In recent years there are more and more Israelis buying international art alongside Israeli art,” Mordechai said.

Israel’s ever-innovative hi-tech culture and bustling arts scene may inform its success in contemporary art, in particular.

“There’s something in contemporary art that deals with the here and now, whether it’s political or social issues, that people identify with more,” Mordechai said. Whether it is the forces of globalization or a string of other factors that make the country an art microcosm, she