Danger of Careless Art Market Talk – artmarketblog.com
A Sotheby’s auction here in Australia on the 26th of August did not go as well as was anticipated with just less than half of the works selling and a final sales figure of AUD$5.77 million without buyers premium against an estimate of $9-$12 million. According to an article in the Australian newspaper, Georgina Pemberton, Sotheby’s head of paintings, described last night’s result as “a reflection of our economic climate and we are now going through a correction in the art market” After making this comment to the Australian newspaper, Georgina then went on to make the following comment regarding the auction to Bloomberg news “Some of the collectors are becoming more conservative, but overall the art market is still very strong”. Hmmm, seems like someone doesn’t know whether they are coming or going.
Other than the fact that these two statements contradict themselves, stating that the market is currently experiencing a correction that is seemingly based on this one sale is rather silly. A market correction is generally understood to mean a drop of between 10% and 20% in a financial market over a short period of time which would require a general market downward trend. Taking into consideration that there has been very little indication that the market is losing strength other than the Sotheby’s auction and that there are no figures relating to the definition of a market correction to back this statement up, to state that the market is experiencing a correction is very premature and at this point, incorrect.
Further evidence that the market is not in a correction came from an auction that took place the next evening by Bonhams and Goodman which experienced a far different result to Sothebys. According to the Bonhams and Goodman website “Record numbers had inspected the paintings at viewings in Sydney and Melbourne, with over 1500 people attending the auction venues, 30% up on the numbers for April. On auction night 250 people packed the Prahran saleroom to see Masterpieces of Australian Art from The Julian & Miriam Sterling Collection sell for $1,976,000 (including buyer’s premium), well over the lower estimate published in the catalogue. The sale of the Australian Fine Art catalogue contributed another $3 million to the result. ” Geoffrey Smith, Director & National Head of Art at Bonhams and Goodman went on to comment that “It was our most successful sale ever.” In total $4.9 million of art was sold against a lower estimate of $3.6 million although interestingly, only 49% of works sold which was the same percentage of works that sold at the Sotheby’s auction. What these results do show is that people are paying more money for the best works and that, although the sale rates may give the appearance of a correction, an proper analysis of the whole market points to more of a market transformation (ie. a change in buying trends and habits as opposed to a down-turn)
Another telling indication that the problem may be with Sotheby’s and not the market is the fact that only around 150 reportedly turned up at the Sotheby’s auction compared with 250 at the Bonhams and Goodman auction. With several more important art auction scheduled in Australia over the coming weeks it will be interesting to see what the results will be.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications