Picasso's women of algiers: a smart investment?

Picasso's painting on display at the SFMOMA Photo: Wallyg

Picasso's Women of Algiers become the most expensive painting in the world this week, as the work received the highest ever amount fetched at auction.

The 1955 oil painting was last up for auction in 1997, fetching $31.9 million. On Monday 11th May 2015, it went under the hammer from a starting price of $100 million, before ultimately selling for a record-breaking $179.3 million, after a flurry of telephone bids drove the price above its estimated $140 million,

"We always knew that it was going to break the world record price, which was achieved here for a triptych by Bacon only last year, at $142m it comes as no surprise that this picture by the genius of 20th century painting, the Mozart of 20th century painting in my mind, Picasso, should sell for $180m. It's a wonderful, wonderful work," Jussi Pylkannen, Christie's global president who also served as auctioneer, told IB Times.

Indeed, it is one of several record-breaking purchases within the art world in recent years. According to estimates, 2015 will see fine art sales total $60 billion, 300 per cent higher than 2010.

The Picasso auction is part of a string taking place this week, with the sum total of sales expected to near $2.3 billion, according to Deloitte's Evan Beard.

"This is about to become the biggest week in the auction world to date," he told Yahoo.

The growth of the art market has been fuelled in part by the rise in high new wealthy individuals in the Middle East, who have increasingly turned to the sector as form of alternative investment.

Is fine art a smart purchase, though?

Dr Clare McAndrew, founder and managing director at Arts Economics, says that returns can be as high as 40 per cent.

With new buyers following other tastes and trends, though, there can be surge in demand for a narrow range of work: "The result is that we have about 30 artists generating all the interest at the top end," she explains.

"Purely from an investment point of view, Picasso's Women of Algiers is a very bad investment because it will be difficult to find someone willing to pay more than this. It's irrational from that perspective."

"What investors should look for is investing in quality art that stands the test of time," she concludes.