The art market is generally considered to be an unregulated market which basically means that it is not controlled or governed according to rule or principle or law. Another term for an unregulated market is a free market the definition of which is, according to the Farlex financial dictionary, “A market economy based on supply and demand with little or no government control” (ie. taxes, subsidies or regulation).

The reasons that people are calling for the art market to be regulated are:

1. To prevent or control insider trading (insider trading is where someone who has access to non-public information through their position in a business or organisation and uses that information as the basis for conducting a market trade with the intention of benefiting from the use of the information)

2. To prevent monopolisation

3. To prevent price gouging (where sellers ask for a price that is much higher than what would be deemed fair under the circumstances)

4. To police the existence of questionable practices such as the inclusion of “right of first refusal” clauses in sales documents

Although the art market is technically unregulated there is one piece of legislation that acts as a sort of regulation and that piece of legislation is the resale royalty (droit de suite). For those of you no familiar with the resale royalty, a very broad definition is “the right of artists to receive royalties from the resale of their works”. In countries where the resale royalty has been implemented art dealers (basically anyone who sells art that attracts a resale royalty) is required to provide a report of eligible sales to the governing body of the resale royalty. According to the UK legislation artists are able to demand that any “art market professional’ (sellers, buyers, intermediaries, sale rooms, art galleries and art dealers) provide information needed to secure payment of royalties. By requiring that an art market professional provide such a report the resale royalty promotes transparency, accuracy, ethical practice and is basically a form of regulation.

Although some level of regulation would seem to be a requirement in a global market estimated to be worth 30-40 billion dollars a year, there are some compelling reasons that too much regulation could be bad for the art market. History has shown that there is very little correlation between the art market and other investment markets such as the stock market and real estate market. One of the main reasons that people are currently moving into art investment is because the art market has shown to be relatively immune to the factors that cause the other investment markets to be highly volatile or to perform badly. It would seem that one of the reasons for the lack of correlation is the lack of regulation of the art market which would suggest that if the art market were to be regulated to the same extent as other investment markets that the art market would then become susceptible to the same factors that affect other investment markets.

So, do you think that the art market should be more regulated and if so, how?

About the Author
Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Making predictions regarding the art market or the value of an artist’s work is always going to be a difficult task but there are certain instances where one can make an educated guess based on common sense, logic and historical data. By analysing artist’s careers, different country’s art markets or the history of the art market as a whole it is often possible to identify a recurring series of events that continually occur in the same sequence or have resulted in the same outcome.

As with pretty much all investment markets, there are plenty of instances where a logical cause and effect scenario can be identified. Take, for instance, the Indian art market, which has recently experienced a major evolution fueled by increased wealth in the country and an increasing participation in, acceptance of, and correlation to, the western art world as a result of the globalisation of the art market. Although the Indian art market is modernising and westernising at a rapid rate there is still a long way to go before Indian art collectors and investors are as open minded and worldly as many western art collectors and investors. Modern installation works, sculptural works and conceptual works have until recently been an almost completely foreign concept for the Indian art market with the traditional paint on canvas being the most widely accepted and recognised medium. Because of the popularity of paintings, Indian art buyers are less inclined to purchase a work of art that is not a painting unless the artist has already gained acceptance and recognition as an accomplished painter. What has been happening in India is artists who have started their career working in mediums other than painting have not been accepted by the Indian art market yet artists who establish their career as a painter first are able to successfully move into other mediums once the market is comfortable and familiar with their paintings.

Because of this trend there is an opportunity to purchase works of art in mediums other than painting by Indian artists whose work may have been overlooked and undervalued due to the fact that they have not conformed to the traditional tastes of the Indian art world. If an artist’s works are considered to be too “modern” or “unconventional” in India, chances are the western art market would be extremely interested in them. There might also be the opportunity to purchase an undervalued work of art by an artist who was working in a medium other than painting but is going to move into painting into the future thus potentially increasing their value as an artist.

Sometimes all it takes is a little bit of common sense and logic to uncover potential opportunities to profit from art.

Image: Bosedkdesigns.com installation by Indian artists Thukral and Tagra

About the Author
Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

I hope that everyone is well. As the Next Star Artist competition is an entirely new concept there were bound to be some areas that needed tweaking. The first change is the removal of the condition of entry that the winner of the competition must donate an artwork to the artmarketblog.com art collection. For those people out there that were opposed to the winner being required to donate an artwork, (even though there is no entry fee and I am doing this purely for artists) the winner DOES NOT have to donate an artwork now.
I am also proposing a change to the judging structure whereby the winner will be chosen from the ten finalists by a group of judges (30 or so) as opposed to a public vote. Each of the judges would be sent the list of finalists and would then make their choice with the winner being the artist who receives the most votes. If anyone opposed this change to the judging structure or has another suggestion please let me know.

About the Author
Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.