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.”
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