Newsletter October 2015: Market Report
As we enter October, the art market’s hazy summer recess starts to feel like a distant memory. The steady trickle of auction catalogues arriving through the door rapidly becomes a raging torrent. Invitations to gallery openings come thick and fast and art-market pundits compare notes on whether they have been invited to the VIP opening of Frieze or indeed to the VVIP opening. For those of us who work in the industry it is an exciting time, tinged perhaps with slight trepidation that life is about to become extremely busy.
As we enter peak-season there is one question that remains unanswered – what will happen in the art market over the coming months? A great deal has happened in the world since the Summer auctions, the last barometer from which we can accurately gauge the state of the market. The economic downturn in China has significantly affected the Chinese market (According to Artnet, total art sales in China and Hong Kong fell 30 percent in the first half of 2015, to $1.5 billion from $2.2 billion); how much this will affect the international market remains to be seen, though we must assume it will have an impact. We know that Russian activity in the market has declined significantly over the past eighteen months, and there is little to suggest this will change anytime soon. Emerging markets are, in general, having a rough time, so that must surely also have an effect. The huge fall in the price of oil presumably doesn’t bode well longer-term for the great art-buying sovereign states of the Gulf region, while the distinct possibility of a rise in global interest rates over the coming year may well have an adverse impact on the activities of investor-collectors. Geo-politically, the world appears to have its share of troubles, so one could be forgiven for feeling a little apprehensive about how this might play out in the global art-market. All in all, it paints a rather gloomy picture.
That said, the market isn’t as predictable as all that. During the world economic downturn of 2008-2009, the much expected art-market crash did not play out as anticipated. Global art sales did drop from $62bn USD in 2008 to $39.5bn USD in 2009, but by 2010 were back up to $57bn USD*. The volatility of the financial markets during those turbulent times appeared to enhance the status of art as an alternative investment, and since 2010 the top end of the market, driven by a truly international client base of super-rich collectors has grown steadily. In 2014, global art sales were estimated at $68.1bn USD, an all-time record. So while we are of the view that it may not all be plain sailing over the coming year, we are not all about doom and gloom. Yes, there may be some corrections and the odd-shock along the way. But against this, there still remains a strong, global demand for top quality, blue-chip works across most of the key sectors, and we expect this to continue for the foreseeable future.
*Data from Dr. Clare McAndrew, ArtEconimics