Winners and losers in the art auction market

Gustav Klimt, Insel im Attersee (1901–02). Sold at Sotheby’s in New York for $53,188,500 in May 2023

The inaugural half-year edition of the Artnet Intelligence Report, compiled by Artnet News contributor Julia Halperin, attempts to describe the current art market by the numbers. The conclusion: prices are generally dropping and bargains are to be had for the selective buyer.

It fact the report doesn’t actually cover the total art market – it’s just auction house sales, and even then private sales and other numbers that might affect gross hammer prices are excluded. For instance, Artnet notes that sales in the most affordable segment – works priced at $10,000 and under – were down 12 percent year on year; but that’s because “many auction houses no longer consider it cost-effective to transact at this low level”. And this is precisely the price range where galleries (and increasingly direct sales from the artist) are at their best.

With the caveat that the art market is defined narrowly, it’s still worth looking at the report if only to see where the speculation is happening (anecdotally we assume that auction sales are a better indication of asset acquisition and disposal rather than a measure of – say – perceived artistic quality).

It opens with a pretty gloomy summary by Artnet’s editor-in-chief Andrew Goldstein: “After staging a blazing comeback from the pandemic in 2021 and 2022, when near-zero interest rates and (let’s be honest) a healthy dose of boredom flooded money into everything from historical masterpieces to animal NFTs, the great global marketplace for fine art lost a whole lot of value – and dynamism – in the first half of 2023”.

The ‘reality check’ page has some of the key stats:

  • $5bn – the value of transactions in the fine art market between 1 January and 20 May 2023. That’s down 14 percent on the year before
  • $184.2m – the amount spent at auction in the period on ultra-contemporary art (by artists born after 1974). Down more than 25 percent
  • $42,172 – average price of a work of fine art sold at auction in the first five months of the year. Down 6 percent
  • $1.2bn – total revenue from works priced at $10 million and up at auction in the first five months of 2022. Down 51 percent
  • minus 22 percent – year-on-year decline in total sales at the Big Three auction houses
  • minus 5 percentdecline in revenue from online-only sales at Christie’s, Sotheby’s, Phillips, Bonham’s, and Artnet Auctions in the first five months of the year (still more than 300 percent up on pre-pandemic 2019)

Ultra-contemporary art: Speculation has boosted the markets for a few of artists like Matthew Wong, Jonas Wood, and Adrian Ghenie – the $6.7m paid for Wong’s River at Dusk (2018) was nearly 38 percent more than it realised on its last appearance at auction just three years ago. But the NFT bubble has burst and buyers have become more cautious; only the top four would have appeared in the list in Artnet’s last mid-year report.

Contemporary art: Action sales for works by artists born between 1945 and 1974 suggest a market in flux – of the top ten sales in the period three were under estimate, three over, and four within range. The names are much as before: Basquiat, Cecily Brown, Yoshitomo Nara, Banksy, Christopher Wood. Artnet’s conclusion: sell now. “Doing so might not return as frothy results as before, but it’s hard to predict the pervading riff of next season, so let’s improvise.”

Post-war art: It seems auctioneers have been complaining (privately) about lacklustre inventory in this category – no Warhols in the first half of 2023, for instance. The highest-selling lot fin the period, Louise Bourgeois’s $32.8m bronze Spider, would have only placed seventh in last year’s rankings. It seems the issue might be as much demand (changing tastes) as supply.

Impressionist and modern art: The five top sellers at auction in this segment (for work by artists born between 1821 and 1910) had never appeared at auction before, which is unusual. They ranged from Picasso’s Nature morte à la fenêtre (sold for $41.8m) up to Klimt’s $53.2M Insel im Attersee.

European Old Masters: Traditionally this category, for artists born between 1250 and 1820, has been relatively immune from the turbulence of fashion: there will always be a market for “absolute, dead-on masterpieces,
in great condition with great history” as one dealer put it. Artnet concludes: “given the nosebleed prices in other sectors, [the Old Masters segment] feels like a relative bargain”.

The big issue is obviously financial: money is not as cheap as it used to be, with investors and speculators clobbered the removal of tax advantages in the States followed by the disappearance of low interest rates. Savvy buyers used to pledge their collections against loans, because the low rates meant that it cost them almost nothing. Today, it costs three times more than it did even a year ago to borrow the same amount. Add in other factors – the Ukraine war, tech layoffs, continued inflation, and more – and the result is a buyer’s market.

The conclusion: “if you are a collector, an investor, or a semi-pro combination of the two, now is the time to be choosy and strike bargains – especially, perhaps, in the ultra-contemporary sector of young art that, after getting supernova-hot over the past two years, has now seen public prices fall by more than a quarter. A caveat: if you are looking for a first-rate historical masterpiece with all the bells and whistles, the dynamic seems to flip, so be prepared to pay [through] the nose”.

The Artnet Intelligence Report: Mid-Year Review 2023 is available as a free download here.

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