Banksy: the most lucrative investment on the market
Buying a Banksy might be one of the most lucrative investments out there right now, as we take a look at how banking on the illusive artist measures up against gold, silver, property and more.
Those that spotted the opportunity and invested in Banksy over the last two decades continue to reap the rewards, acquiring – as one buyer did in 2003– an editioned canvas: Keep it Real for £80, which proved an 80% year-on-year return, worth in excess of £400,000 last year.
Around 70 print releases of Banksy works have been made in the past 17 years, totalling an estimated 30,000 prints altogether. It’s estimated that one-third of these prints have been signed by the artist himself, adding significant value to at least 10,000 pieces.
Owning a work accredited to Banksy offers a chance to be a part of his illusive legacy, to own a slice of his iconic brand, but there is equal opportunity to be found financially especially in comparison to the current growth from other traditional methods of investment.
Banksy vs Property
For starters, let’s consider the property market. The current average annual return you might see on any property investment in the UK since 2010 is 3.6%. Nationwide house price data shows that the highest percentage increase on a property purchase in 2018 was 2.5% in Q1, and there has been a general downward trend since then. The percentage increase on property value in Q3 of 2018 was only 2.1%.
Based on this, taking your £418,000 from the sale of Banksy’s Keep it Real, in 2018, and investing it in a property of the same value would see you sell that same property for £431,543 in 2019 (using the generous 3.6% annual return calculated from 2010, rather than 2018’s decreasing figures).
And what about other potential sources of investment, how does investing in a Banksy compare to those?
Banksy vs Gold, Silver and Oil
Choosing to invest in gold or silver assets is certainly a more traditional path than putting your money in the work of a street artist, but S&P GSCI data shows just how much the market for these precious metals fluctuates.
Gold is suffering with a -0.25% yearly decline, and silver is losing value at -7.9%.
S&P GSCI data for oil, another common investment path, strikes a similar tone, showing a -1.94% year-on-year decline:
So, back to Banksy – compare the worth of sought after Banksy works over the same time period:
|Year||Signed Girl With Balloon Print||Girl With Balloon Canvas||Banksy Choose Your Weapon Red|
The numbers here increase at a steady rate. The value of Banksy’s Girl with Balloon on canvas, has risen by 18% on average over the last five years, and is growing year-on-year – rising 22% in value in 2017, and 35% last year. Meanwhile the same work as a signed print, sees an even better return on investment, rising at an average rate of 25% per year since 2013.
Whereas the initial outlay to purchase a Banksy is higher than you’ll need to get into the gold or silver markets, if you do have that cash available it’s clear where you’re better off. For one last comparison, let’s visit the world of stocks and shares.
Banksy vs Stocks
For this example, we’re going to consider Amazon stock specifically. Amazon, like Banksy, is disruptive, worldwide, and world-class. Recognition of this brand has grown over a similar timespan as Banksy’s reputation.
As you might expect given the domineering position of Amazon in the ecommerce market and its strategy of acquiring brands in other markets, Amazon stocks are growing in value annually. There have been a few particular leaps in value over the last few years. In 2016, Amazon stocks sold at $749.87. By 2017, they were going for $1169.47 and by the end of last year the share price was $1502. Do the maths and you’ll see that’s a 30% year-on-year growth. Compare that to the 80% average annual return on investment (since 2010) which Banksy’s Choose Your Weapon could realise, and it somewhat pales in significance.
What the experts say
If the figures aren’t convincing enough, we spoke to Will Dickson, Head of Portfolio Management at Prydis Wealth on the matter of investing in a Banksy, and this is what they had to say:
“Individuals are increasingly looking to buy artwork as investments, and when looking at the historical rates of growth for some up and coming artists this has, in some instances, proved to be a shrewd move. Successfully picking the right piece can provide diversified and strong returns. Furthermore, an art enthusiast also receives the added “dividend” of enjoying the piece hanging on their wall, as it is important to consider that the primary motivation of a purchase should be the appreciation of the art. Nevertheless, Banksy’s almost cult status has driven his prices to record levels and interest continues to grow.
The meteoric rise of Banksy has helped prices outstrip even some of the best performers in the stock market. One of the stand out shares in the global equity markets since 2010 has been Amazon, although its 9x rise has been eclipsed by the 110x return of Banksy’s Choose Your Weapon over the same period.”
Banksy’s cult status – heralded for his stunts and subversive statements – just sky rocketed after his more recent trick, involving shredding one of his own artworks as it went under the hammer at Sotheby’s; the stunt saw the piece increase in value on the spot. (We’d like to add a MyArtBroker warning here – shredding any Banksy’s you own in your own home will simply serve to decrease the value. Only Banksy can get away with such deviousness). Banksy’s consistent and innovative ways to be subversive will only prove to grow value of his work.
Choosing a Banksy to invest in
Our Banksy Buyer’s Guide includes some excellent tips to help you choose the right piece. In this guide, we offer advice on how to accredit a Banksy, and highlight how the popularity of certain Banksy designs such as Girl With Balloon have affected their price.
If you want to start a conversation around investing in a Banksy, or are ready reap the rewards of a previously well-thought out investment, then MyArtBroker.com are the experts. With a worldwide network of dealers, private collectors, galleries and independent specialists your dedicated art broker will make the most covetable Banksy works available.