Increases in China

Barron's is reporting fine art sales at auction are growing at a faster rate than global art sales. The reason is many Chinese investors see fine art as a better investment than stocks and bonds. Most of the increased sales are coming through Hong Kong sales. The articles notes the sales in China should not be considered a precursor to higher global sales as the Asian market is different and collectors look for more trophy art than the other regions

The next large growth market is noted as India, "where sales of modern and contemporary art from several auction houses rose a collective 36% in 2015 ".

Barron's reports

Fine art auction sales in greater China are bucking global trends by rising instead of tumbling.

The gains aren’t likely to fire up global art sales, however. Instead they reveal a return to normal for Chinese buyers who view tangible assets like fine art to be a better investment opportunity now than volatile stocks or low-interest-rate bonds.

Still, the 18% jump in auction sales in China, including Hong Kong, Macau and Taiwan, is welcome good news for an art market in the midst of a slump. China sales at the two biggest global auction houses, Christie’s and Sotheby’s, as well China’s top two houses, Poly Auction and China Guardian, totaled $2.3 billion in the first half, up from $1.97 billion last year, Artprice.com data show.

That gives greater China a 35% share of the global fine art market, surpassing the U.S., where fine art sales tumbled 48% to $1.7 billion in the first half versus a year ago and the U.K., where sales fell 29.5% to $1.4 billion, Artprice.com says.

Confusing the picture is most of these sales appear to have taken place in Hong Kong, an international arts sales hub for buyers throughout Asia and the West who are interested in art from across Asia. Hong Kong sales at the four auction houses rose 19.2% this year from autumn 2015 while sales in China fell 2.6%, says Anders Petterson, founder of ArtTactic, citing figures from his London art market analysis firm.

Petterson suggests stepping back, and looking at growth patterns over the last five years, to get a better sense of trends. From 2010 to 2015, sales of Western post-war and contemporary art as well as modern and Impressionist art soared 273%, while sales of Chinese art fell 15%. That suggests what we’re seeing now is more of a recalibration than a profound shift upward.

“I think the current trend is more a result of a maturing Chinese art market that has remained subdued for more than five years and where collectors and investors are again seeing opportunities,” Petterson says. “With limited investment options available,” he adds, Chinese’s wealthy are “likely to increasingly look at art as an alternative investment.”

One reason any revival in Chinese art buying won’t spread West is only a handful of buyers seem attracted to showy purchases of art from the likes of Picasso and Basquiat, among them Long Museum owners Liu Yiqian and Wang Wei. One of their most recent high-profile purchases was Amedeo Modigliani’s Reclining Nude, 1917-18, bought for more than $170 million at Christie’s last November.

When it comes to Chinese works, buyers prefer the modern-period, works painted by artists born from about the late-1800s to early-1900s. The category snagged 47% of first-half fine art sales in Hong Kong, says Artprice.com.

That high percentage may have been boosted by sales of Chinese modern ink painter Zhang Daqian’s works, which have fetched steadily higher prices in recent years. Peach Blossom Spring, 1982, a late period “splashed ink-and-color” work from Daqian, hit a record of HKD271 million ($34.7 million) at Sotheby’s after a 50-minute bidding frenzy last April. The winners: Liu and Wang, who also have been on a buying spree for Chinese art.

“I think the large majority of Chinese will always be more interested in buying their own art, which I think will continue to ensure the growth in the domestic market,” Petterson says.

Chinese and Western buyers seem to be thinking alike when it comes to Chinese contemporary art sold at auction, however. The category represented only 13% of sales in the first half, and sales are on a steady decline, falling 36% from 2010 to 2015 at the top four auction houses, as Western buyers pulled away. “The current slowdown in the West is likely to keep a lid on the Chinese contemporary art market going forward,” Petterson says.

A wild card in the future of China’s art market is China’s Taikang Life Insurance’s purchase of a 13.5% stake in Sotheby’s. China Guardian is a major stakeholder in Taikang, and Petterson says the purchase could help Sotheby’s build its China business, where it has struggled to make inroads, and could fulfill China Guardian’s ambitions to be the country’s biggest auction house.

The real future for Asia may lie in India, where sales of modern and contemporary art from several auction houses rose a collective 36% in 2015, ArtTactic reports.

Source: Barron's