ForYourArt Highlights: The Economist on the Art Market, Auction Sales and the Future of Contemporary Art
According to The Economist, contemporary art is hopefully going to be the saving grace of the art market as it continues to dominate sales and will in turn hopefully bring the recent buying slowdown back to full scale.
“Suspended Animation” was a special report published in The Economist in November 2009. Focusing on what at that point had been the recent fall out in the art market, it stipulated that spending on contemporary art was increasing and making up 30% of the auction houses’ sales, up from less than 10% in the last economic slump of the early 1990s. This article provides a thorough report on the actual numbers, percentages and global trends in spending at auction houses like Christie’s and Sotheby’s in the last years of the 2000s. The full article is a must-read for collectors, both new and experienced, but we’ve excerpted a few key quotes below.
“[T]he [art] market generates interest far beyond its size because it brings together great wealth, enormous egos, greed, passion and controversy in a way matched by few other industries.”
“What makes this slump different from the last, he says, is that there are still buyers in the market, whereas in the early 1990s, when interest rates were high, there was no demand even though many collectors wanted to sell.”
“The best that can be said about the market at the moment is that it is holding its breath. But this special report will argue that it will bounce back, and that the key to its recovery lies in globalisation. The supply of the best works of art will always be limited, but in the longer run demand is bound to rise as wealth is spreading ever more widely across the globe.”
“That upward trend [of increased investment in art] is still continuing, and many of the new buyers take a particular interest in the art of their own place and time.”
“Auction records remain dominated by Impressionist and modern works, but the biggest expansion in recent years has been in contemporary art.”
“Old Master paintings, for example, have stuck at around 5% of both Sotheby’s and Christie’s sales for many years. By contrast, contemporary art, which in the early 1990s accounted for less than 10% of Sotheby’s revenues, grew to nearly 30% of greatly increased revenues by last year. Dealers and auction houses now sell more post-war and contemporary art than anything else. This report will concentrate on that part of the market, which accounts for about half the world’s art trade and most of the excitement.”
“Part of the extra demand has come from a large increase in the number of museums. Over the past 25 years more than 100 have been built, not only in America and Europe but also in the sheikhdoms of the Persian Gulf and the fast-growing cities in Asia; sometimes in partnership with Western institutions, such as the Guggenheim or the Louvre, sometimes on their own. Many of these institutions have made their mark by buying contemporary art.”
“One of the biggest changes since the market last peaked in 1989 has been the expansion of the auction houses and the change in the nature of the dealer business. Twenty years ago auction houses sold to dealers, and dealers sold to private customers. Today many collectors are advised by auctioneers, both at sales and privately.”