Art Market: Recession, Shocks & Hope

I still continue to visit art galleries and museums in New Delhi and Chandigarh (or wherever I am in the world) as a matter of habit. I am one of those ‘art for art’s sake’ type. I am neither an art expert or a buyer. But I do discover vibrational links with certain works/creations of art, and feel very comfortable in the company of artists. So the following information about art/commerce/recession fascinated me.

In the wake of the economic meltdown last year, “the best that can be said about the market at the moment is that it is holding its breath,” reports The Economist. “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.

“Sales of contemporary art fell by two-thirds. The world art market had already been losing momentum for a while after rising vertiginously since 2003. At its peak in 2007 it was worth some $65 billion, reckons Clare McAndrew, founder of Arts Economics, a research firm—double the figure five years earlier.

“Since then it may have come down to $50 billion. But the 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.

“The current downturn in the art market is the worst since the Japanese stopped buying Impressionists at the end of 1989, a move that started the most serious contraction in the market since the second world war. This time experts reckon that prices are about 40% down on their peak on average, though some have been far more volatile. But Edward Dolman, Christie’s chief executive, says: ‘I’m pretty confident we’re at the bottom.’

“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. Christie’s revenues in the first half of 2009 were still higher than in the first half of 2006.

“Almost everyone who was interviewed for this special report said that the biggest problem at the moment is not a lack of demand but a lack of good work to sell. The three Ds—death, debt and divorce—still deliver works of art to the market. But anyone who does not have to sell is keeping away, waiting for confidence to return…”

“The World Wealth Report, published by Capgemini and Merrill Lynch, charts the spending habits of the rich the world over. It includes art as one of a range of luxury items they like to buy. According to the report, in 2007 there were over 10m people with investible assets of $1m or more.

“During the boom the number of wealthy people in Russia, India, China and the Middle East rose rapidly. In 2003 Sotheby’s biggest buyers—those who purchased lots costing at least $500,000—came from 36 countries. By 2007 they were spread over 58 countries and their total number had tripled….” More here…

Meanwhile Sotheby’s Impressionist and modern art sale last night beat the company’s top estimate…The $181.8 million auction was Sotheby’s first evening Impressionist sale in New York in 3 ½ years to beat its high estimate ($163.6 million), the publicly traded auctioneer said.

“The tally was nearly triple Christie’s International’s Nov. 3 result and Sotheby’s equivalent sale in May, when its top two lots failed to sell in the wake of the financial crisis. All but 10 of the 66 artworks sold. ‘Panic is out,’ said New York dealer Helly Nahmad. ‘The market is back’.” More here…

And here’s a BBC report…

The New York Times: “Art prices soared back to pre-crash levels in New York as bidders from Europe, China and Russia broke sales records for Impressionist and modern pictures…” More here…

And have a peep here at the world’s museums/art galleries…