Art Market Blog – Art Market Correction Predictions
My opinion is that the art market will correct when we least expect it because so far people have been predicting when the art market will correct without success. The factors that would have had a major impact on the art market in the past such as a stock market downturn in a particular country, the US sub-prime mortgage crisis and other economic problems have not had as much of an effect as people have predicted. The art market is a very different beast to what it was 10-15 years ago and as such is far less predictable than people seem to think. There are many different economic and financial factors that have had an effect on the art market but not to the point where it has caused what would be considered to be a correction.
The globalisation of the art market and the new wealth in countries that have previously not had the money available to become major players in the art market has basically created a situation where if one country or market is affected by a financial crisis there will be another that hasn’t been affected to replace it. Because of this I think that the cause of the correction will be more likely to be directly related to the sale of art and people’s opinion of the prices being paid as opposed to people’s financial situation or the state of the economy.
By directly related to the sale of art I am referring to things such as:
-a high failure to sell rate for a major art auction
-a poor result at auction for a highly publicised, major artwork
-major galleries or auction houses experiencing financial difficulties
-rumours or news of major art collectors or major art investors getting out of the market
-poor attendance or results at a major art fair
If an economic or financial crisis were to major effect on the world art market I think that it would have to be a major global crisis which is unlikely to occur. I predict that the main cause of the art market correction will be an event or occurrence that has a negative impact on people’s confidence in the art market causing a chain reaction that quickly spreads around the world causing doubt and analysis. The question we need to be asking is how long can the limits be pushed before people begin seriously questioning the correlation between the prices being paid and the value of the work.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.