A new era for the art market

An estimated €43 billion was spent worldwide last year on fine art and antiques. The Irish public may have grown weary, sceptical or even, understandably, blasé about the term “billions” but this is a vast sum being spent on what are, essentially, luxury and nonessential goods. It’s a huge global market that spans swanky art auctions in London and New York where a single painting can cost tens of millions, and modest antiques fairs in Irish provincial hotels where little collectibles can change hands for a tenner.

Despite, or perhaps because of, global economic uncertainty, the international fine art and antiques market is in vibrant health and attracting new waves of buyers, some seeking so-called safe-haven investments. The buyers range from fabulously rich Russian oligarchs buying trophy art to market-stall browsers hoping to find a Clarice Cliff teapot.

In June, Sotheby’s held a contemporary art auction in London which realised £75.8 million (€86.8 million). The average price paid for a painting was £1.43 million (€1.63m). Buyers from 38 countries participated in the auction, many by telephone or online. Despite the huge sum of money generated, the auction was not especially newsworthy. Similar sales, with equally astounding prices, have been taking place in London and New York.

A month earlier, Christie's held a Post-War and Contemporary Art sale in New York where bidders spent a staggering $495 million (€386m) the highest total in world auction history.

Record prices
Outside the hothouse world of the art market, most of the 20th-century artists including Basquiat, Lichtenstein, Pollock, Rothko may not – yet – trip off the tongue as easily as Degas, Monet, Renoir or Van Gogh but they are among the new global superstar painters whose work is sought after by the world's richest collectors. Some of the prices paid were quite stupendous. Number 19, 1948, one of the famous abstract drip paintings by the American artist Jackson Pollock, made $58.3 million (€44m);Woman With Flowered Hat (1963) by Roy Lichtenstein made $56.1 million (€42.4m); Dustheads (1982) by Jean-Michel Basquiat made $48.8 million, (€36.9m) and Untitled (Black On Maroon) by Mark Rothko made $27 million (€20m).

After the sale, Christie's auctioneer Jussi Pylkkanen said: "We are in a new era of the art market. Pictures are making prices we couldn't have imagined a few years ago."

Such auctions represent the pinnacle of the international market for fine art and antiques which is almost evenly split between public auctions (47 per cent) and sales through dealers and galleries (53 per cent).

The figures are from a report, published in March, commissioned by the European Fine Art Foundation. Its author, Irish woman Dr Clare McAndrew, is a cultural economist specialising in the fine and decorative art market and the founder of the research and consulting firm Arts Economics.

The three biggest markets for fine art and antiques in 2012 were the US (33 per cent); China (25 per cent) and the UK (23 per cent). London and New York are the global centres drawing custom from around the world and are the principal venues for sales by the big three international auctioneers: Christie's, Sotheby's and Bonhams.

China, which has emerged as a major force in the last decade, has also spawned some big new auction houses but unlike their western counterparts these don’t, yet, do business overseas.

The international fine art and antiques market peaked in 2007 when international turnover exceeded€48 billion. Business slumped briefly following the global credit crunch crisis of 2008 and the value of the market crashed to about €28 billion.

The recovery has been remarkably swift. By 2011, the value of the market had rebounded to more than €46 billion. Last year's dip to €43 billion was primarily caused by a decrease in China where demand cooled after a years of sizzling growth.

Superstar artists
Early signs suggest that 2013 will see sales rise again. McAndrew's report confirms that the most strongly performing sector is 20th-century art. The post war and contemporary-art category accounted for 43 per cent of the market by value last year, while the modern-art sector was second with 30 per cent.

Modern and contemporary artists, such as Picasso, Bacon, Richter and Warhol have become the superstars of the international art market because, according to McAndrew, their work is “accessible for global audiences” and doesn’t require “an understanding of history” unlike Old Master paintings with their classical and Christian references.

The most significant sale in 2012 was at Sotheby's New York in May when The Scream by Edvard Munch made $119.9 million (€90.6m). One of four versions made by Munch, it became the world's most expensive work of art ever to sell at auction.

While the international market is dominated by 20th-century paintings, other categories performing particularly well include antique silver, jewellery, porcelain, Art Deco furniture and rare books. Items from imperial (pre-communist) Russia and China continue to attract huge interest from newly rich collectors in both countries reclaiming their lost royal heritage.The fine art and antiques market looks set to continue to expand and, despite China’s growing importance, McAndrew believes that London and New York are likely to continue to be the dominant global centres of the trade.

In addition, she says, to having “highly-developed cultural infrastructures, including networks of experts, institutions and a wider range of ancillary services” both cities are “among the most transparent and regulated centres for the trade, where the legal and fiscal systems, along with various commercial codes, offer a level of protection and guarantees to both buyers and sellers”.

Next week Who’s buying fine art and antiques, and are they good investments?