Art presents a unique investment opportunity, by which it can be enjoyed while it appreciates in value. Jack Phillips investigates the potential of investing in Australian art
Editor’s Note: This story originally appeared in Volume III of B.H. Magazine. For access to future issues, subscribe here.
Yves Hernot’s extravagant Sydney penthouse is a gleaming mishmash of mirror and gold, a lavish backdrop for an art collection he claims is worth “over one million dollars.” Perched high above the glittering harbour, with Hyde Park and St Mary’s Cathedral just beyond, it’s undeniably a million-dollar view. Several, I would expect.
For 70-something Hernot, art has been a lifelong obsession. His collection is so extensive that it spills off the walls and into the bathrooms, moonlighting as storage spaces. There are drawings by Brett Whiteley, and paintings by Sir Arthur Streeton, Hilda Rix Nicholas, Blak Douglas, and death-row artist Myuran Sukumaran, plus jewellery and objets d’art.
Hernot is one of a growing subset of collectors who are focused exclusively on Australian art. While the local art market has historically lagged behind that of Europe, North America, and China, it now offers significant collecting and investment opportunities.
In 2023, the Australian art market was valued at around $140 million, according to the Australian Art Market Review, in a global market worth $64 billion – highlighting its potential despite its much smaller scale.
And, while there isn’t the transaction volume of London, New York or Hong Kong, Australian galleries and auction rooms are becoming a desirable place to start or expand a collection. Auction houses like Deutscher and Hackett, Smith & Singer, and Shapiro Auctioneers have contributed significantly to market valuation with high-value sales driven by blue-chip artists, such as Emily Kame Kngwarreye, Ben Quilty, and Arthur Boyd, coupled with a wider appreciation for Indigenous art, which continues to gain traction. The sale of Indigenous artist Sally Gabori’s Ninjilki (2008) illustrates this, a painting which sold for a whopping $251,591 in 2023, way above the pre-sale estimate of $60,000–$80,000.
Ursula Sullivan opened Sullivan+Strumpf gallery with partner Joanna Strumpf in 2004 and has championed contemporary artists like Ramesh Mario Nithiyendran, Dawn Ng, Naminapu Maymuru-White, and Lindy Lee, all of whom have seen increased demand for their work in recent years. Lee unveiled a $14 million commission at the National Gallery of Australia in October, Ng exhibited at Frieze New York in 2024, and works by Nithiyendran have been acquired by institutions like The Art Gallery of New South Wales, among others.
It’s provenance like this that means Sullivan+Strumpf attracts some of Australia’s biggest collectors. While cultural value is a matter of opinion, provenance is paramount. “If an artist is collected by a museum, it means the concept of longevity is more secure,” explains Sullivan, who says cultural relevance is a factor in rising demand but concedes investment potential poses allure, too. “The artist will be taken seriously for longer, and their art will still retain some kind of cultural and possibly financial value,” she adds.
According to the Sotheby’s Provenance and Art Valuation Guide, an artwork’s ownership history can significantly impact its value. Artworks featured in museum collections or well-known exhibitions are likely to appreciate more reliably. Authenticity is equally important; and proper certification inevitably helps avoid risks like forgeries, which are commonplace in the art world.
Ralph Hobbs, co-founder of Nanda\Hobbs gallery, says when it comes to less experienced collectors, it’s important to draw a clear line between their birth as art pieces and their subsequent journeys through time and collectors’ hands. Like Sullivan+Strumpf, Nanda\Hobbs represents a sizable roster of local artists, including stalwarts Caroline Zilinsky, James Drinkwater, and Yoshio Honjo.
Before deciding to show an artist, “we look for three primary things,” explains Hobbs. “Number one, they have a really strong technical basis. Number two, the artist has got something to say. And finally, there’s got to be some sort of tertiary endorsement.”
If long-term appreciation is important to the buyer, Hobbs states that risk profile, budget, liquidity, diversification, and investment timeline should all be taken into account when building a collection.
Caroline Zilinsky’s artwork has experienced a steady increase in value as her reputation has grown, and notably since she was unveiled as an Archibald Prize finalist in 2016. Known for her distinctive, emotionally charged portraits. The Haunting of Timothy Shaw (2020), sold by Leonard Joel for $12,000 on an $8,000-$10,000 estimate. Only a small amount of the artist’s work has hit the secondary market, but there are strong signals to suggest her pieces pose a good investment opportunity.
Del Kathryn Barton has also seen a positive upward trend in the auction prices of her work since her first Archibald Prize win in 2008. After her second win in 2013, for her portrait of actor Hugo Weaving, Barton’s work has increased in value. You are what is most beautiful about me sold for $432,000 in 2018, far surpassing its initial estimate. As Barton continues to exhibit at major institutions like the National Gallery of Victoria, and other international shows, collectors see her pieces as both culturally significant and valuable long-term investments.
Industry awards and accolades, much like inclusion in museums and institutions, play a significant role in validating an artist’s work. Such recognition can positively influence prices in both the primary market – where artworks are purchased directly from the artist – and the secondary market. They help establish an artist’s credibility and appeal, driving demand and, in turn, increasing the value of their work across different sales platforms.
It’s getting easier to buy art, too. Today, galleries and auction houses are online stores with digital stockrooms complementing detailed catalogues with prices and provenance of every exhibition and auction event. Andrew Shapiro, Managing Director of Shapiro Auctioneers, says the pandemic had a huge impact on market behaviours, sparking a significant increase in comfort with buyers purchasing art online.
“Art being online has changed everything, it has created a bigger audience,” explains Shapiro. “People who feared walking into an auction room have lost that fear because they can now buy pieces from the comfort of their own home.”
When asked if the buyers he sees are purchasing purely for investment purposes, Shapiro is reluctant to say. “People aren’t buying art to put it into storage. They’re buying things that they’re going to hang on the walls,” he says.
Cullen.
However, he concedes that the market is more open than ever and the information available for new collectors has never been better. First-time buyers and collectors alike have many avenues to increase their knowledge, be it with a view to finding a piece to elevate a space or one that could appreciate over time. Either way, reputable art valuers are a mere Google search away.
“A valuer looks at the market value of a painting,” explains David Hulme, co-founder of Banziger Hulme Fine Art Consultants. When engaged, it’s Hulme’s job to ensure the buyer is given the best possible advice to make an informed purchase and doesn’t overpay for a work. “We might find the best example of an artist’s work, but we have to be careful that we don’t overpay for it… otherwise it’s going to be very difficult to prove to be a good investment,” explains Hulme.
Hulme has spent 20 years serving both private collectors and corporate entities, guiding his clients through the often opaque waters of art acquisition. “Art valuation isn’t just about knowing the price but understanding the value,” says Hulme. “Buying art is as much about passion as it is about investment.”
Having spent time as an art teacher and auctioneer, Hernot’s approach to collecting is driven by a deeply personal narrative, intertwined with a savvy investment strategy. While viewing his personal collection he tells me of the poignant use of Captain Cook iconography in his piece Fraught & Crosses (2021) by Blak Douglas; pulls an Arthur Streeton painting off the wall to see when he bought it; points out a harrowing Jewish ghetto police arm band from WWII, which he hasdisplayed under glass.
The Douglas purchase was a shrewd move, whose work hasappreciated in value since his Archibald Prize win in 2022.“It’s very compulsive,” laughs Hernot, who paid $9,500 for thepiece in 2021 as a lockdown hit, and estimates the painting’s value to be around $20,000 if it went to auction today.“You might not have enough money, but you still find the moneyto buy it,” he adds.
Ultimately, investing in art demands both passion and pragmatism. Gallerists, auctioneers, buyer’s agents, and collectors seem to push hard that it’s as much about engaging with human creativity and cultural expression as it is about money. But like any financial asset, a well-researched, diversified, and patient strategy is key to success. While the market may face near-term fluctuations, the long-term potential of art as a solid investment remains intact.
Australian Artists To Watch
- Julia Goodman
- Gemma Smith
- Ramesh Mario Nithiyendran
- Caroline Zilinsky
- Atong Atem
- Vincent Namatjira
- Jonny Niesche
- Aida Tomescu
Notable Recorded Sales Of Work By Australian Artists
- Brett Whiteley’s Henri’s Armchair (1974-75) sold for $6.25 million in 2020, and The Dove in the Mango Tree (1984) sold for $1.96 million in 2021.
- Sir Arthur Streeton’s The Grand Canal (1908) sold for $3 million in 2021.
- Frederick McCubbin’s What the Little Girl Saw in the Bush (1904) sold for $1.5 million in 2021.
- Jeffrey Smart’s The Arezzo Turn-Off II (1973) sold for $1.35 million in 2021.
Tips For New Art Collectors
While the world of high-stakes art dealing may seem exclusive, it is far more accessible than it appears. If you’re willing to build relationships with the art sellers, the artists, and the market itself, you’re in with a good chance of building a valuable collection over time.
- Frequent gallery openings, museum exhibitions, and art fairs like Sydney Contemporary. These are not just venues to view art, they are classrooms where the senses are educated and the mind is sharpened. Absorb as much as you can about styles, periods, and what moves you personally.
- Research the artist’s history, their presence in galleries, and any exhibitions or critical acclaim they’ve garnered.
- Auctions can be exhilarating theatres of drama. If you choose this route, attend a few auctions without the intent to buy. Observe the flow, the language, and the tactics. When ready to participate, set a maximum bid and stick to it.
- Galleries, by contrast, offer a more personal buying experience but require a different approach. Build relationships with gallery owners and staff. They can be invaluable guides to understanding an artist’s potential and can provide first dibs on new pieces.
- Once acquired, art requires care. Consider the environment of your home or storage. Factors like sunlight, humidity, and temperature can affect the longevity and quality of artwork.
- Think of collecting art not merely as an investment but as a pursuit driven by passion. While there’s potential for financial gain, there are no guarantees that any particular artist’s work will appreciate in value. The real reward lies in the experience – discovering new artists, developing your taste, and building a collection that reflects your personal connection to the art
If you’ve enjoyed this feature article on investing in Australian art, consider a few more of our favourite stories – direct from the pages of B.H. Magazine:
