The NY Times just posted an interesting article on some of the changes in the art market and what buyers and sellers are doing. The article reports the decline in overall art sales by 7% in 2015 over 2014 which comes from TEFAF and we reported on a few days ago. With that and the current state of the global economy there are fewer third parties willing to make guarantees, and without the guarantees, potential sellers are holding on to quality art. As we know the market is complicated and there are many areas of interconnection where one item may impact several others.
There seems to be more of push for curated sales, but as we saw in the year end Sotheby's disclosures, there too, having curated sales negatively impacted private sales transactions. There is also a move to bring in new collectors through use of decorators as well as more emphasis on the "professional class" where buying tends to be in the high hundreds of dollars to under $10,000 or so. Not nearly as exciting as the million dollar plus sales, and it is a segment of the market that should not be ignored.
Overall a very interesting article to read with some good perspective on what is happening in the art market today.
The NY Times reports
Source: The NY TimesWhat happens next now that the latest art market boom has apparently slowed?
With both supply and demand at top-end auctions showing signs of shrinkage, the art world is seeking opportunities for growth further down the value chain.
According to the European Fine Art Foundation, or Tefaf, which tracks sales using data from the auction houses and an online survey of 6,000 dealers, $63.8 billion in art and antiques were sold worldwide last year, a decline of almost 7 percent over 2014.
The ever volatile art trade has had plenty of blips, of course. Sales fell 12 percent in 2012, and a hefty 36 percent in 2009 during the financial crisis. But there are plenty of reasons to believe that 2014, in which Tefaf calculated that $68.2 billion in sales were made, will be a high-water mark for some time to come.
The art market, like the global economy, has been knocked by slowing growth in China and the turbulence it has created in financial markets. Even the hyper-rich have lost money. A Forbes survey published on March 1 said that for the first time since 2010 the average net worth of the world’s billionaires has dropped – it is now $3.6 billion, down $300 million over 2015.
Plenty of billionaires collect art, and last year the supercharged auction market for postwar and contemporary works dipped, falling 14 percent to $6.8 billion, according to the Tefaf report.
“It’s early days,” said Clare McAndrew, the founder of Arts Economics, who prepared the Tefaf report. “But if the top end is thinner, aggregate figures will go down. A lot of high-end sales aren’t profitable, and it’s difficult to see the auction houses courting sellers in the same way.”
With economic conditions more uncertain in 2016, auction houses and their financial backers have been more hesitant to offer guarantees. As a result, owners of trophy works, if they do not have to sell, have been more reluctant to risk offering them at auction.
Just two lots, with a combined low estimate of £240,000, were guaranteed by Christie’s at its Feb. 11 sale of contemporary art in London. The £58.1 million total achieved was 50 percent less than at the equivalent sale last year.
This year, even what would seem to be surefire blockbuster lots are being offered without guarantees. On March 11, for example, Christie’s announced that it would be selling a Peter Paul Rubens tour de force, “Lot and His Daughters,” dating from 1613-1614, in its evening old masters auction in London on July 7.
Offered without a guarantee by a descendant of the German banker and railroad magnate Baron Maurice Hirsch de Gereuth, who owned the painting in the 19th century, this hitherto little-known masterwork carries an estimate of at least £20 million, or about $29 million.
But if the top of the auction market for contemporary art looks as if it might have peaked, maybe demand can be reinvigorated from the bottom up.
That is certainly the thinking at Sotheby’s, which on Tuesday held its inaugural “Contemporary Curated” auction in London. The format, well established in New York, where the company has held eight such sales, seeks to attract new buyers, with estimates as low as £500.
In an effort to broaden the auction’s reach, Sotheby’s enlisted the fashion designer Erdem Moralioglu as guest curator. The sale raised £2.8 million from 201 lots, 76 percent of which found buyers. Twenty-three percent of the event’s almost 400 registrants were under 40 years old, the company said.
A 1998 Antony Gormley cast iron figure sculpture, “Insider VIII/Weeds I,” sold to a European collector for £173,000, while at the other end of the price spectrum a 2013 ink drawing by Joy Gerrard, “Protest Crowd, Moscow, Russia (Version 1),” sold for £938 against a low estimate of £500.
“We wanted to offer clients a platform to sell lower-priced works, to foster the spirit of collecting,” said Alex Branczik, Sotheby’s head of contemporary art in London. “In the future, some of these clients will go on to transact at higher levels.”
The spirit of such “entry level” art buying could hardly be better exemplified than by Tim Sayer, a retired BBC news writer, who has bequeathed his collection of more than 400 paintings, sculptures, drawings and ceramics to the Hepworth Wakefield museum outside Leeds in northern England. Selected works from the collection will be exhibited at the museum from April 30 through Oct. 9.
Mr. Sayer, 70, has spent more than half a century amassing his eclectic collection. Contemporary art has been his main passion, and he has bought works by such major names as Gerhard Richter, David Hockney, Sol LeWitt and Henry Moore from various London dealers, often paying in installments and never spending more than £7,000.
“I never thought about investment,” Mr. Sayer said. “All I thought about was whether I could raise the money to buy it.”
“There were plenty of collectors in the 1970s of modest means interested in the history of art,” he added. “Now there is a vast gap between the old-fashioned connoisseurial collector and the new money type.”
The sight of paintings, sculptures and books covering almost every available inch of wall in Mr. Sayer’s home in North London is certainly more redolent of the 1970s than the 2010s, as is the notion of a relatively modestly paid professional being able to put together a museum quality art collection.
In 2015, Britain supplanted China as the world’s second largest national art market, after the United States, with 21 percent of sales, according to Tefaf. But, as the report also pointed out, the number of British households considered to be middle class fell by 27 percent from 1980 to 2010 while the number of wealthy households rose by 33 percent.
Those dynamics have had an impact on what might be called today’s “professional class” collecting, as evidenced at the Affordable Art Fair in Battersea Park last weekend. One of three such annual fairs held in London, the Battersea edition featured 110 dealers offering contemporary art at prices of £100 to £5,000.
Habitues of Art Basel and Frieze might dismiss much of what was for sale as “park railing” art with negligible investment value, but on the closing Sunday the fair was packed with 30- and 40-somethings pushing strollers, happily browsing the booths to a soundtrack of Kid Creole and the Coconuts.
Eyestorm, an online retailer in London, was one of the many dealers doing plenty of business, albeit within the modest price parameters of the Affordable formula. Seven floral skull prints made in 2015 in an edition of 50 by Jacky Tsai, a London-trained Chinese artist and fashion designer, found buyers at £1,560 each, unframed.
But some at the fair said they still found the art out of reach.
“There’s some really nice stuff, but it is more expensive than I thought,” said James Pegram, 36, a structural engineer who lives on the outskirts of London. He and his wife were looking to pay about £1,500 for something “large and bold” for their house that would prompt visitors to say “that’s really cool.”
The market needs its Tim Sayerses as well as its billionaires, but in today’s low-growth, “squeezed middle” economy, there are few people with the will or the means to fill their homes with art. With spending pinched at both the top and the bottom of the price scale, we might not be using the word “boom” again any time soon.
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