International auction house Sotheby's held a one-day exhibition in Dublin last week of impressionist and modern art works that it will sell next month in London. The move by Sotheby's to promote a London art sale in Ireland is a measure of the very healthy financial state of the Irish art market and an indicator of the company's intention to profit from it.
Clearly, the auction house hopes to foster a greater Irish interest in international art by encouraging domestic collectors and investors to expand their interest outside the Irish market by diversifying their art collection.
Since the mid-90s, both Sotheby's and Christie's have held annual sales of Irish art in London. These have been a commercial success and have introduced the work of Irish painters to a wider international audience. Last May, Sotheby's sale of Irish art realised some €9 million. Irish buyers accounted for half of the top 10 art purchases made at the London auction - aillustration of just how keen domestic collectors are to buy Irish paintings.
The limited appeal of Irish art in the international marketplace remains in marked contrast to the strong domestic demand evident for the work of Irish artists. Irish buyers and collectors have a pronounced preference for national over international art, which reflects a conservatism and a narrowness of artistic taste that seems outdated in this multi-cultural and globalised world. A national preference for Irish paintings has, however, economic consequences in a domestic art market where demand has outstripped supply. In recent years some unremarkable Irish paintings have achieved very high prices at auction. Such sales have made the Irish art market appear overheated and overpriced. Whenever price moves too far ahead of value in any market, a bubble may be forming. And Irish art is no exception.
Art has become a new form of asset class and one increasingly attractive to investors as a store of long-term value. Undoubtedly, the strong sustained domestic demand for Irish paintings is the by-product of an unprecedented economic boom that has generated a great increase in wealth over the last 15 years. Some of that new money has found an outlet in art, for a mixture of motives. Fewer purchases, it now seems, are made for the love of art and the mere joy of collection. More paintings, it also seems, are bought for investment, and for their potential price appreciation in an increasingly overvalued Irish art market. But will Sotheby's self- interested advice to Irish collectors, to diversify their art portfolios, be heeded? That should be tested by next month's London auction results.