Art market booms amid financial market turmoil

By Jennifer Hill

LONDON (Reuters) - Auction prices of arts and antiques are rising on the back of growing demand from investors trying to mitigate financial market volatility, a survey shows.

A growing number of consumers are turning their attention to these alternative investments as the credit crunch continues and investors take a "flight to safety", according to the Royal Institution of Chartered Surveyors' (RICS) first art and antiques survey.

Increasing demand stoked prices in the sector during the first quarter of this year -- when many City workers received annual bonuses -- the data shows.

A fifth more surveyors reported a rise than a fall in lot prices overall, and 50 percent more said they had seen price rises in the 5,000 pound-plus bracket.

Lower-priced art and antiques also saw price increases, but at a lower level.

Four percent more surveyors reported price rises, rather than falls, in lots worth up to 1,000 pounds, while seven percent more said they had seen prices rise in the 1,000 to 5,000 pound price bracket.

RICS said the figures suggested that consumers with disposable incomes were looking to buy arts and antiques as long-term investments, but that amateur enthusiasts were reining in their spending.

"Many investors are using their disposable incomes to buy in at the high end with the hope that value will continue to stay firm while stocks and bonds ebb and flow," said spokesman Christopher Ewbank.