Questioning the Art Market – artmarketblog.com
I was recently asked some questions about the art market for a magazine article and thought I would share my answers. Hope you enjoy !!!
1. Last year there was a trend for portrait pieces, why do you think this is?
Although portraiture fell out of fashion, as it has done on several occasions, the fact that there is so much scholarly, academic and art historical support for the genre means that there will always be a market for portraits – a market that can only continue to get stronger each time the genre comes back into fashion. The long term value of a work of art is linked to a certain degree to the extent to which one can disassociate the work of art from the artist, and the extent to which one can assign value to the actual characteristics of the art object as an independent entity. Because portraits require a high level of technical skill to get right, and because the face is universally recognisable and has universal characteristics, the portrait is able to be more easily assessed using a more objective approach. This makes the portrait a more attractive option to art investors and collectors during times of financial crisis, such as we experienced last year, when long term safety and justifiability become important factors.
The value that can be placed on portraits because of their status as historical documents is the sort of future proof intrinsic value that will always remain with the portrait and cannot be disassociated from the portrait. Regardless of what happens to the art market or to the reputation of the artist in question, classical figurative works of art (portraits in particular) will always have significant technical, historical and documentary value. The fact that the physical characteristics of figurative portraits are so comparable across the whole genre, and so easy to rank, also means that they are also easier to value when compared to other genres.
2. Can auction houses or art market analysts predict trends in the market?
Predicting art market trends is becoming more and more difficult as fine art becomes a more globally recognised and accessible status symbol, and a more widely accepted alternative investment. As a much wider range of people from different cultural and socio-economic backgrounds become active in the art market, a situation has arisen where there are so many different groups of art market participants with different agendas, that trying to foretell the buying behaviour of each group is extremely hard. To predict trends these days requires a very deep knowledge and understanding of the behaviour of art buyers as well as an extremely well developed trend sensing radar.
3. Do social, political or cultural issues affect market trends?
Social, political and cultural issues all have a profound effect on art market trends. Fine art is often used as a tool for making statements regarding social, political and cultural issues. A consequence of this is that people’s perception of such works can often be altered by their own beliefs or by important events of the day.
4. Do you think that the sale of a piece of art is just at the end of the day due to personal preference? Can buyers be strategic?
Buyers can definitely be strategic when it comes to purchasing fine art and are doing so at an ever increasing rate due to the greater level of acceptance of the benefits of approaching art as an investment. However, because everyone has a personal taste when it comes to fine art, a strategic approach is best undertaken with the guidance of an unbiased art advisor or via an art investment fund where the works that are invested in are chosen by a group of experts.
5. What may / may not determine the end sale price at an auction?
There are a myriad of different factors that can determine the final sale price of a work of art being sold at auction. A few, however, are much more influential than others. One of the most important factors to consider when buying or selling a work of art at auction is how many people are likely to be competing for that particular work of art. All it takes is two determined bidders for the auction estimate to fly out the window and the final price to skyrocket beyond all expectations. The energy of an auction sale can become all consuming and cause even the most timid of individuals to become super competitive. Another important factor that can affect the final sale price is the estimate given to a work of art. An estimate that is too high can discourage people from bidding for a work and an estimate that is too low can cause people to become suspicious about that work of art.
6. Do you think the artist’s name behind the art itself has a large factor into how much a piece would sell for? Can this limit the art in any way?
The commercialisation of the contemporary art market has evoked a scenario where artists are often looked upon as celebrities and performers who are expected to act in a certain way. Art buyers who view art as a status symbol will often view the artist’s social reputation and level of fame as being crucial factors when it comes to deciding whether or not to purchase a work or art. A result of this is that artists often have to conform to the desires of rich art buyers, and produce works that they will like, which can severely limit the work that the artists can produce.
7. What is the significance of branding and the correct marketing for pieces of art?
In theory, a work of art should really sell itself. However, the reality of the situation is that the conceptual nature of a large amount of the contemporary art being produced, combined with the increasing commercialisation of the contemporary art world, has created a situation where artists need to be marketed correctly in order for their work to be properly appreciated and stand out from the rest of the crowd. Without correct branding and marketing, an artist is likely to find it difficult to sell their work and differentiate themselves from the already saturated contemporary art market.
8. The Mugrabi family are said to own a monopoly on the Warhol catalogue. Do you feel that a collector can be excessive? Can a person own too much art?
The problem with collectors who monopolise the market for a particular artist is that those collectors can then manipulate the rate of supply and demand and consequently manipulate the price of that artist’s work. This sort of situation can have a seriously negative impact on people’s perception of an artist’s work and, as such, I would never such behaviour by collectors.
**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