Crises and wars dampen the art markets

Berlin Market observers are talking about cooling off, correction, downturn. Whatever you want to call the development, there were enough setbacks in this art market season. A billion dollars was expected, but in New York’s Fine Art Week in May Sotheby’s “only” brought in 799 million dollars. Sotheby’s will again refrain from presenting its half-year figures in 2023.

Christie’s London June 20th and 21st Century Art sales were down 32 percent on the corresponding sales last year. For the entire first half of 2023, revenue at this home shrank by 23 percent to $3.2 billion.

According to Christie’s CEO Guillaume Cerutti, this is the result of a “more problematic macro environment”. There is no doubt that the art markets have become more dependent on the global economic situation this year.

Economic expectations are poor, the Ukraine war, high inflation and soaring interest rates are weighing on consumption. An unstable banking sector and the expectation fueled by analysts that an economic slump is to be expected in the USA, which is still the most important art market country, are paralyzing.

Of high-profile collections that flowed into auctions in the first half of the year, only those of music producer Mo Ostin at Sotheby’s ($123.7 million) and real estate mogul Gerald Fineberg at Christie’s ($210 million) stand out — nothing compared to the Paul Allen collection, which last November at Christie’s became the most expensive collection ever sold for $1.5 billion.

The market indicators of this year are heterogeneous. The fact that the saturated “Baby Boomer” generation born between 1946 and 1964 was gradually throwing its collections onto the market was already a fact before the Corona phase. But who are the new buyers?

The generation of wealthy “millennials” born between 1981 and 1995 are the new market pillars, who also buy properties for 1 million and more. They have different tastes than their parents and prefer what galleries and auctions offer as “ultracontemporary art” created in the last five years. Here the market is still in motion, even with prices in the millions, especially when it comes to the widely sought-after range of works by female and black artists.

The fact that this market is still flourishing despite a few flops for latently expensive artists such as Damien Hirst, Mark Grotjahn and Martin Kippenberger is thanks to the cautious estimates of this season. Even by Louise Bourgeois, whose monumental spider fetched 32.8 million at Sotheby’s, less spectacular sculptures declined. For Gerhard Richter there was also a market correction with minimum bids and declines.

Whoever logged into the auctions of modern and contemporary art had to experience a silent room and lonely bids that served the guarantors for long periods. The fact is that there were setbacks in the areas of Impressionism and Modernism: normal valued works by Edouard Manet, Claude Monet, Paul Cézanne, Fernand Léger and Yves Klein declined in New York and London evening auctions.

Asians support the market

Asian buyers acted as market pillars. In Sotheby’s evening auctions, more than 30 percent of the bid went to Asian bidders. Above all, Klimt’s landscape painting “Island in the Attersee”, which went to a Japanese collector for 53.2 million dollars. Works worth millions by Vincent van Gogh, Paul Gauguin, Claude Monet and Henri Matisse also migrated to Asia here.

A return of Japanese collectors to the auctions in Hong Kong is emphasized by Phillips, who with their new base in the cultural quarter of Hong Kong registered 471 percent more Japanese bidding activity than in 2022 and reached a total of 38 percent new buyers.

With a branch that opened in Shanghai in May, Sotheby’s, in the 50th year of its presence in China, now wants to attract new buyers from the Chinese mainland. The anniversary auction in Hong Kong reached $85.5 million, down $9.5 million from spring 2022.

The art of forty-year-old “emerging artists” (Hao Liang, Loie Hollowell, Rafa Macarron) was very popular here. Earlier, Sotheby’s had raised $32 million for a guaranteed diptych of Chinese classic Zhang Daqian. With modern and contemporary art from Southeast Asia, the auction giant attracted not only domestic collectors but also bidders from Indonesia and the Philippines on July 3 in Singapore.

The most expensive lot of this six-month period, Gustav Klimt’s last painting “Lady with a Fan”, which realized the equivalent of 108.4 million dollars at Sotheby’s in London, went to a collector in Hong Kong.

Mediocrity rules the European auctions

The Chinese auction house Poly, with an office in London, is now getting involved in the European competition for material and customers. It had lost many customers to Sotheby’s, Christie’s and Phillips auctions in Hong Kong during the pandemic period. According to the Myartbroker network, “increasing digital auctions, greater influence from millennial collectors and the demand for art that is anchored in society’s consciousness” are driving forces of the Asian art market.

With the exception of a few top works, mediocrity reigned in the European auctions of the first two quarters. In the German-speaking auctions, Ketterer is at the forefront with a half-year turnover of 40.9 million euros. At Van Ham, the 500th auction brought the highest result to date of 22 million euros and increased total sales from January to June to 33.7 million euros. The record result of 379 million euros, which all German auctions generated in 2022 according to artprice, will hardly be achievable this year.

In Switzerland, surcharges in the millions were rare. In the June auction of the Kornfeld gallery, there were only three of them, with hammer prices ranging from 1 to 1.7 million Swiss francs for works by Ferdinand Hodler, Pablo Picasso and Felix Vallotton. A brilliant winged altar by Lucas Cranach the Elder is located near Koller. Ä. and workshop with almost a million Swiss francs gross at the top. In the Austrian auctions, the top price of almost 1.3 million euros achieved at Dorotheum for the interior scene “A Look in the Mirror” by the Turkish painter Osman Hamdi Bey is the highlight of the season.

Not only the sales but also changes in the company structure of long-established houses, above all the Hôtel Drouot in Paris, are shaping the market in this half-year. The two Parisian investment companies Groupe Chevrillon and Vesper Investissement bought 30 percent of the oldest French auction house after the half-year figures had risen by 14 percent to 338 million euros.

Big increase in sales for Bonhams

In the British company Bonhams, which last year acquired the international auction houses Bukowskis (Stockholm), Bruun Rasmussen (Copenhagen), Skinner (Boston) and Cornette de Saint Cyr (Paris), the half-year balance sheet rose by 32 percent. With 552 million dollars, the house achieved a proud growth rate with its network in a world market that had shrunk in terms of top pieces.

The Paris auction house Artcurial, which already owns the luxury real estate company John Taylor and the horse dealer Arqana, has had a presence in Switzerland since June. It has bought into the Basel auction house Beurret Bailly Widmer, which was founded in 2011, for an undisclosed amount. These activities show that the so-called medium-sized market, which the two big players only serve with online auctions, has a future despite all the prophecies of doom.

More: Half-year results: More than 20 percent drop in sales for Christie’s