The art market is undeniably international. Works are being created and traded world-wide. And increasingly prices are tempting producers and purchasers alike to cross borders.
In 2001 the US outperformed Europe on the art market. Today, that balance of power has been reversed. European auction sales held up despite the uncertain economic climate in the first half of 2002.
As in 2001, Christie’s and Sotheby’s produced similar performances on sales in H1 2002 (EUR 546 million and EUR 522 million respectively between January and July), with similar buy-in ratios (71% of lots at each auction house found a buyer).
After London it is now Paris’s turn to host the showdown between the giants of modern art as the Matisse-Picasso exhibition arrives in the French capital, juxtaposing 160 works by Pablo PICASSO and Henri MATISSE. But they often come up against each other at auction.
Perhaps the best-known of the new generation of artists now selling at public auction are the Young British Artists — »young » in our classification means born after 1960. Having achieved international acclaim, they are now increasingly making an impact on the auction floor.
The US has led the art market for more than 20 years. In the mid-1990s, at the peak of American dominance, it hosted nearly 70% of the world’s fine art sales. Today, this has fallen to 38.7% and the US is on the point of being overtaken by the UK.
The art market is traditionally quiet in August. But Australia, the world’s ninth largest market in 2001, has taken advantage of the summer break to hold the first big sales of the coming season. Sale catalogues feature a number of the Aussie artists that have recently been making waves at auctions.
In the last two years, the art market has been attracting ever more aficionados in the US. But American collectors are happier to buy than to sell, and the consequence is a host of buyers eager to snap up the few artworks that do come up for auction.
In the mid-1990s, painting was the only segment of the art market that investors considered of speculative interest. But recently, with growing demand and a wave of artistic renewal, other creative formats have proved as, or more, lucrative than paintings.
The European art market is winning its face-off with the US. France, the UK, Germany, Italy, Spain and Scandinavia currently account for almost 80% of sales volumes.
High-profile auctions at Sotheby’s and Christie’s in the US usually make May the eagerly awaited highlight of the early year art season. And results at the impressionist and modern sales certainly hit the headlines. No one will forget the all-time record price paid for a sculpture, Brancusi’s « Danaide », which went for USD16.5m on 7 May 2002.
The price of artworks continues to climb. Some see this as the result of a speculative mood among investors. In fact it is no such thing. Investors are being highly selective in what they buy and this selectivity underpins the soundness of the market.
On Wednesday 10 July 2002, "The Massacre of the Innocents" by Peter Paul RUBENS became the most expensive old master painting ever sold at auction. It was only recently identified as a Rubens having previously been attributed to the lesser-known Jan van den Hoecke. Once the painting’s authorship was clarified a record price was clearly on the cards, particularly as Peter Paul RUBENS’ index has been in stunning form lately: +540% since 1997.
In the art market history is made every day. Any auction could see an artist’s work sell for a new all-time high. This year, in three days from 26 to 28 June, we saw no less than 71 record prices set for artists around the world. Nine of these were at the sales of contemporary art held by Sotheby’s and Christie’s in London.
Over the past six years, prints and multiples have yielded a greater annual return than works on canvas -8% vs. 6.82%. This, however, is only an average and returns vary hugely from one type of product to another.
Drawing was formerly considered a secondary skill, of use mainly in preliminary studies for painting, sculpture or architecture. But enthusiasts were not long in seeing that such early sketches had their own expressive qualities and their own financial value. Among the main beneficiaries of recent price rises have been drawings by the Northern schools: up 67% since June 2001.
Recent sales at the London auctions of 24 and 25 June confirm the resurgence of French impressionism which had been rather overshadowed in 2001. The healthy demand for the school was underscored when Claude MONET‘s Nymphs fetched GBP12,250,000 at Sotheby’s. At the same time, the popularity of British and US impressionists, who made such a splash in 2000, seemed to have waned.
Many economists, such as W. Beaumol, have questioned whether works of art yield better returns than financial assets, even at the height of the late-eighties speculative boom. Over the periods studied, returns were lower than those available on equities markets. But with share prices apparently locked in a downward spiral, the conclusions today are somewhat different.
Prestigious auctions are increasingly concentrated in the same places and during specific seasons. By holding high-profile events at the same time and in the same place when the art season is at its peak auction houses can achieve economies of scale. They seek to galvanise the media with press conferences and other events so as to attract collectors to a sale of some exceptional particularly sought-after pieces.
If you think art prices are prohibitive, think again! Half of all artworks are auctioned at below EUR 1,000. Top hammer prices and other exceptional works auctioned over EUR 100,000 account for only 1.5% of auctioned lots! 15% of works sold are multiples or lithographs and rarely sell for more than EUR 1,500.
The price of paintings by artists belonging to the Cobra movement has risen by 50% in the last six months in what clearly amounts to a significant revaluation of their work.
French auctions have always been concentrated in Paris and dominated by the auctioneers of Drouot, who between them knocked down around 50% works of art sold at auction. The Tajan auction house had the highest turnover in the art auction market.
In a market segment which attracts young collectors hammer prices rise and fall in line with sales. Despite being a particularly unstable market, contemporary photographers have commanded steadily rising prices in recent years. But prices are still influenced by economic swings and speculation. The talent of these artists is not yet rooted in art history or in the market. Selection is particularly tough.
While rumors suggest Drouot, the traditional home for France’s auctioneers, may be sold, Sotheby’s and Christie’s have burst onto the French market. France recently reformed its auctions market throwing it open to competition. French art has long held a great allure for foreign auction houses, and Sotheby’s and Christie’s have been quick to make the most of the new regime.
Prestigious auctions held in Hong Kong, Melbourne, Singapore, Tel Aviv, and other locations, by Sotheby’s and Christie’s have set the art market in an international context. The US continues to dominate with around a 50% share in 2001. But Europe’s share is substantial and gaining ground each year. The rest of the world still has a timid presence in the auction market but is becoming more active. The market share commanded by US auctions has fallen from 66.3% in 1997 to 48% in 2001.