Amidst de­clin­ing global art sales, mar­ket play­ers look to Asia for re­newed growth

Sotheby’s lat­est Im­pres­sion­ist, Modern & Sur­re­al­ist Art evening sale raised US$240.8M, a 78.5% in­crease from 2016 and said to be “a state­ment on the mo­men­tum of the global art mar­ket in 2017.”

Singapore Business Review - - COVER STORY -

AAfter an­other year of sharp de­cline in global art sales, early auc­tion re­sults for 2017 have of­fered com­fort to art professionals. On March 1, Sotheby’s Im­pres­sion­ist, Modern & Sur­re­al­ist Art evening sale raised a record US$240.8M, a 78.5% in­crease from last year – thanks largely to a rare master­piece by Gus­tav Klimt that achieved US$59.3M, demon­strat­ing there was still pent up mar­ket de­mand for works of ex­tra­or­di­nary cal­i­bre. This prompted the auc­tion house to de­clare the re­sult as “a state­ment on the mo­men­tum of the global art mar­ket in 2017.”

Christie’s evening sale, a day be­fore, also had high en­ergy with no­table bid­dings from Asia. Com­bined, the auc­tions achieved high sell through rates of 92% by lot and 96% by value, setting a world auc­tion record for a work by René Magritte. Yet, there are still some clouds hang­ing over a mar­ket which is of­ten seen as a bell­wether of high net worth in­di­vid­u­als’ views on the world’s econ­omy. As stock and for­eign ex­change mar­kets con­tinue their roller coaster ride amidst the un­cer­tain­ties re­lated to the new US ad­min­is­tra­tion poli­cies, many art play­ers are also wait­ing to see how art sales could be im­pacted by China’s lat­est mea­sures to stem cap­i­tal out­flow, in­clud­ing a vet­ting of over­seas trans­fers above US$5M.

Edie Hu, vice pres­i­dent, art ad­vi­sory spe­cial­ist at

Last year, 31% of what Christie’s sold world­wide went to Asian buy­ers, com­pared with 29% in 2015.

Citi Pri­vate Bank, notes that the on­go­ing tight­en­ing of reg­u­la­tion on over­seas trans­fers could have an im­pact on the mar­ket, though she be­lieves it is more likely to af­fect the lower end rather than the higher end of the mar­ket. “There are many high net worth clients who have a lot of in­vest­ment out­side of China due to busi­ness deal­ings in­volv­ing over­seas oper­a­tions and part­ners, and they will con­tinue to buy art and real es­tate. This is more likely to af­fect the af­flu­ent clients,” she says.

A break in the clouds?

“I think the auc­tion houses in Hong Kong are brac­ing them­selves for the fact that it’s go­ing to get harder for Chi­nese col­lec­tors to get their money out of China.

More im­por­tantly, it is also harder for them to get con­sign­ments be­cause clients are con­cerned about the cur­rent un­cer­tain­ties and don’t want to put their best works on the mar­ket. I think every­body is in a cau­tious wait-and-see at­ti­tude, but there is still some op­ti­mism. Art tends to be more about pas­sion in­vest­ing, and peo­ple can sit on their hands for only so long, and then at some point the ra­tio­nal side will lose to the emo­tional side. They will buy,” adds Hu.

Af­ter a dif­fi­cult 2015, when global art sales were es­ti­mated to have con­tracted 7% – the first an­nual fall

Je­hangir Sabavala’s The City-ii, Cour­tesy: Sotheby’s

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