CNBC Europe Sees Art Market Growth in Emerging Markets

Diane Mehta of CNBC Business Europe has an article on the recent downturn in the art market. She reviews many of the items which have been posted and written about regarding stalled sales and auction house difficulties. The article is good recap of what has happen along with some of the rationale behind the downturn after years of growth, especially in the contemporary art market, and looks toward the future.

Mehta also delves into the blurring of lines between dealer and auction house (which I have posted on in the past on the AW Blog), such as direct from artist studio to auction and auction houses purchasing galleries, private sales and selling at art fairs. She also points out changing markets, with the future growth in China and Hong Kong sales, and a shifting to the Middle East with Sales in Dubai.

She states Marc Porter, president of Christie’s Americas, says the distinction between a dealer and an auction house is a fine line, and the question is really about which distribution method is the most profitable for the seller. He imagines a future where an established artist sells at auction without the constraints of a dealer: “Artists, free from having an obligation to only one dealer who controls her market in a particular region, are given access to the markets around the world.” Top-level dealers, Porter points out, typically sell the best works to an established client roster, not the general public, and some require that they handle any resale of the artwork as well. 


However those relationships and roles morph, the big worry is that people won’t part with their artwork so easily anymore. “It’s a supply-driven marketplace,” says McAndrew. If works are kept off the market over concern they’ll be devalued if they don’t sell, prices go down and that scares more sellers off, creating a vicious cycle. “What everyone wants is steady, slow increases in prices, versus sales that can’t be sustained,” she adds. 


Mehta continues But while economic globalisation kept prices at unsustainable levels, it’s that global audience that may help the market bounce back. “Dubai and Hong Kong encourage free trade, and these will be the centres people sell and buy from,” says McAndrew. New centres, together with the internet and art fairs, diversify the market, so insulating it from what might have been a worse downturn. 


George Sutton, senior research analyst at Craig-Hallum, agrees: “In past cycles you saw the US and Europe as the predominant markets — today, add the Middle East, Russia and China. I think demand can come back more quickly than people realise, and may be driven from outside the US and Europe.” 


An excellent article to read and for general market background on what is happening and has happened in the recent past in the global art market. To read the full article, click HERE.