Art market: first signs of instability?

   |  4 October 2011  |  AMA  |  Tweet  |  LinkedIn

Hong Kong, 4 October 2011, Art Media Agency (AMA).

Is the art market escaping the crisis? This week numerous press articles tried to answer this question. Judging from some of the positions taken, we could point out some tendencies that currently could not be qualified as alarming or even disturbing.

The recent Asian art auctions held at Sotheby’s in Hong Kong, as well as at Christie’s in New York, were victims of commentaries. When talking about these sessions, it is important to note that only the higher market and objects of certain quality are, according to many specialists, insensitive to the financial crisis.

A Georgina Adam article, published in Financial Times, makes a recapitulation of American sales that, in her opinion, were successful in the context of the crisis with an average of 70-75% of lots sold. This percentage could go under the bar of 60% in the case of contemporary art, all the while reaching very positive results in the modern and ancient art market.

We find the same percentage of unsold lots from the Asian contemporary art auction which took place at Sotheby’s on 3 October in Hong Kong: 176 lots were proposed, 27% of which were unsold. This provoked many analysts of the market who now believe that the demand for Asian contemporary art is dropping rapidly.

An article by James Pomfret, published by Reuters clearly announced this with headline “Cracks appear in Asian demand for contemporary art”. For Marion Maneker, from the Artmarketmonitor website, this last affirmation is completely false and the Hong Kong auction was a success. According to him the percentages of unsold pieces is still weak and this manifests the good health of the art market. The last results are going in that direction as Sotheby’s have succeeded in selling 95% of the lots proposed and also doubled the high estimations announced on 4 October during a classical Asian art auction – a world record for a work by the Chinese artist Zao Wou-ki from 1968 is proving this theory. The auctions have reached $8.85m and they remind market specialists of their position: the demand of an exceptional work of art stays high even during these times of crisis.

The politics of the “premium lots” – the lots for which the auction houses seeks heavy guaranties in order to be able to outbid – have equally been pointed out in order to explain the unsold rate of September. Some art dealers do not hesitate to accuse this practice to explain the important unsold rate of the last sessions.

In regard of this multitude of parameters, and of each piece’s unique character, it is difficult to explain the numbers and to place a reliable diagnostic on the art market. What is less disputable, is the fact that ancient and classic art in today’s context appear as the refuge value of contemporary art, which, in normal times, is the object of all speculations.

For analysts of the art such as Artprice, Arttactic or the index Mei Moses the report is similar; the art is resisting the crisis. We could read in an analysis by ArtMarketInsight (released in September) that ended like this: “If certain economists prone bankrupt the art market, so strong in the fists historical semester, is still not hearing the noise of the falling of the economical institutions or the apocalyptic gossips on the street.” Arttactic’s Twitted thread took the index, Mei Moses, that showed that the characteristic values of this index made more profits for the fourth trimester 2011 than the stock shares.

If Asian art seems crisis-impervious, this is not the case of Islamic art, which, in an auction by Sotheby’s, London (on 4 October), saw its unsold rates reach the 70%. The large sales that are to take place at London at the same time as the Frieze Art Fair, will depict if Asian art makes an exception, then it is the only one to resist this financial instability context.

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