A Buyers Market in Australia

To show the market slowdown is not specific to the US and UK markets, here is an excellent report from the Australian by Corrie Perkin on the state of galleries and auctions houses in Australia.

The article makes an interesting point in that Australian auctions were off 35% in 2008, from 2007, but that level was still above the 2006 levels. Perkin makes the conclusion that perhaps the 2007 market was overheated, and is now just starting to settle down. Well cool down, settle down it has, but is it a short term readjustment, or a longer term downturn. That is the real question.

Perkin states At their August winter auctions, Sotheby's, Bonhams and Goodman, and Deutscher and Hackett struggled to sell about 50 to 60 per cent of their consigned works, down from about 80 to 85 per cent in 2007.

Sales figures had also dropped, with the on-the-night total sales figure for each company about 30 per cent lower than pre-auction estimates. (Some paintings did sell in the days after the auctions, however.)

The art market boom was officially over. As the US and British financial meltdown started to affect the local economy, people stopped spending big money on paintings. After a decade of growth, the market was contracting and auctioneers, commercial gallery owners, artists and collectors were nervous.

Perkins continues The 2008 correction has seen many industry players revise forecasts, trim costs, slash 2009 marketing budgets and, in some cases, lay off staff. Dealers such as Savill who trade in pre-owned paintings are opting to buy rather than sell, and some brokers say it's much harder to generate interest among clients than it was a year ago.

Is the downturn just a temporary readjsutment, or is it perhaps much worse, a total consrtriction of the makret. That is why it will be interesting to observe the sales of fairs and auctions in early 2009, and determine if all levels of the market will remain slow as the last quareter of 2008 or if interest and demands starts to pick up.

Perkins mentions how in the early 1990's there was a rather large downturn in the market, and it evtually turned around. She also discusses how exciting many of the 2007 sales were, with standing room only showrooms of bidders and sense of excitment.

The article is very interesting to read. To read the full artilce in the Australian, click HERE.