Try a new investment portfolio

Antiques make an interesting investment and with investors looking for alternatives, Arab artifacts are growing in value.

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With stock markets around the world in meltdown, one can be forgiven for looking for a doorway to a different kind of investing. Some even think that doors themselves can be a profitable acquisition, particularly antique ones from the Gulf. For example, old doors in Oman were often made of a very rich, dark brown cedar wood. Long after the houses were gone, doors were preserved and, as a result, grew in value. At the Showcase Antique Art and Frame shop in Dubai, an Omani door that sold for Dh3,500 (US$953) in 1997 is today worth Dh12,000. Similarly, antique Arabic chest sets that in 1987 were priced at an average Dh1,000 each are today worth between Dh12,000 and Dh13,000. "An antique will always increase in value so it is a fantastic investment," said Sharon Harvey, owner of Showcase Antique Art and Frame. "From a retail perspective, I will never ever turn down a good antique, because it will always sell." More investors are considering alternative investment opportunities, such as jewellery and antiques. The real money in antiques is in that small area of the trade commonly referred to as "investment grade antiques". Collecting investment grade antiques is similar to investing long-term in the stock market, experts believe, since investment grade stocks, if held between 10 and 30 years, make money. Investment grade antiques make up a very small percentage of any antique category, contributing to their novelty and appreciation. "There are many factors that can influence value - the artist, the condition, the age, the rarity, the provenance. All these factors are important when making decisions about what to buy, and finding items that tick all these boxes can be difficult," said Michael Jeha, the managing director of Christie's Middle East. "While it is true that art and antiques can prove a good investment over time, like with all sectors it is important to be aware that markets can [move] down as well as up." According to the Royal Institution of Chartered Surveyors (RICS) survey on arts and antiques for the second quarter of this year, confidence in the arts and antiques market for the period turned somewhat negative compared with the previous quarter, although prices remained stable. Chartered surveyors - who advise on property at every stage of its life cycle - were far more downbeat about the performance of the lower value elements of the market, while prices as a whole were reported to have appreciated steadily. According to RICS, on balance 20 per cent more surveyors reported a fall rather than a rise in furniture lot prices. "From an investment point of view, there are all sorts of different aspects to the art market, as in the financial market," said ­Matthew Girling, the chief executive of ­Bonhams Auction House for the UK and Europe. "Different things are more risky when they have shorter-term, more interesting benefits, and others are more stable, meaning the more traditional areas in the market like old masters, ­Impressionist paintings and such." For the quarter, 18 per cent more surveyors on balance reported a decline in prices from the previous quarter than did those reporting a rise for lots in the price band of £1,000 (Dh5,000) to £5,000. That suggested that consumers may be trimming back on spending on such investments. "Typically, if there is a downturn in the economic markets, the art market goes into it quite late and gets out of it quite late," Mr Girling said. "Our clients tend to be quite wealthy so they hang on to their art collections. The idea is that if the market is slipping, they don't want to put their paintings into a fragile market." Investment authorities recommend not putting more than 10 to 15 per cent of the value of an investment portfolio into art and antiques at any time, particularly during periods of uncertainty. "We are not immune to everything going on around us," Mr Girling said. "People don't look to buy items like pictures and jewellery or whatever until they feel as though their business is back on the right footing." Antique dealers and auction houses note the skyrocketing value of art and antiques from the Middle East and South Asia, which today enjoy the same kind of novelty and high value that Impressionist art enjoyed a decade or two ago. "Local antiques are an especially good investment if you are thinking of taking it out of the Middle East - you can't go wrong," Ms Harvey said. A number of small shops in the UAE sell antiques ranging from Islamic art to old Arab artefacts, although experts say that the concept of antique collecting has not caught on among Gulf nationals, since many either inherit such artefacts or exhibit a preference for the "new and shiny". Among those stores specialising in regional antiques are Al Falasi Islamic Art and Folio Antiques in Dubai. Another common place to find valuable antiques from the region are the country's traditional souqs, although discovering a real gem is a challenge. However, recent art and antique shows held in Dubai and Abu Dhabi suggest a growing awareness of the value of collecting antiques from the region. Mr Girling said there was a shift in "fashionable" antiques, where paintings once sought after by ­antique collectors had now eased in value compared to more ethnic and nationalistic artefacts. "Emerging economies and national art has kind of replaced the idea of buying within a period," he said. "That is why there is such exponential growth in Middle Eastern and Indian art, also South African art and Australian art. This is moving forwards quite rapidly." Still, experts emphasise the importance of investing in antiques for passion first, and not to make a profit, since often an antique which appears profitable up front may not appreciate as well as one that is of good quality and out of fashion. "Always buy for quality - the best examples by a particular artist, maker or period," Mr Jeha said. "Quality tends to hold its value, even in difficult times." [e-mail]