While old economies are struggling, growth is accelerating in the BRICS coun tries. The five BRICS -Brazil, Russia, India, China and South Africa- have been enjoying much stronger economic expansion than the developed countries and China’s growth in particular has profoundly modified the geographical structure of the global art market according to Thierry Ehrmann, the founder and CEO of Artprice, the world leader in art market information. Moreover, in Singapore, Beijing and Hong Kong, politicians are aware of the enormous economic potential of art for their state or their city, and their governments strongly support major cultural events including Contemporary Art fairs. In addition to the 49% growth in auction revenue from artworks in China, a number of other Asian countries have also posted particularly dynamic growth, such as Singapore (+22%) and Indonesia (+39%). This growth has been driven by the emergence of new and very wealthy collectors and a growing number of art investment funds. As a result, the Asian art market has become the most high-end area of the entire globe. For example, 12.1% of works sold in Asia sell for between $100,000 and $1m, versus 2.2% for the rest of the world. China, Asia’s leading economic power and world leader for sales of artworks, has surprised everyone not just by its acquisitive capacity but also by its independence. It accounts for the highest auction results (with 774 auction results above $1 million recorded in 2011 compared with 426 in the USA and 377 in the UK), mostly generated at auctions in Beijing and Hong Kong. Even if China were deprived of the strong Hong Kong sales of Christie’s and Sotheby’s, it would easily remain the first global marketplace! In 2011, the global art auction market generated 21% more than in 2010 and there is not a single segment of the art market that did not progress in terms of tur - Thierry Ehrmann Art price growth base 100 in 2000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 250 200 150 100 50 © artprice page 4 nover. Compared with 2010, Modern art added $1.2B, Post-war art added $372m, Contemporary art added $291m, Old Masters added $124 million and 19th century art posted an increase of $43 million. In addition, bulimic buying has not left any medium on the side-lines. 2011 saw the sale of more paintings, sculptures, photographs, drawings and even prints than 2010. Indeed, driven by the rocketing prices of the Chinese Old and Modern masters, drawing has really come into its own, with its annual revenue up by $1.318 billion over the year. This year, Artprice’s annual art market report – based on 6.3 million auction results from 4,500 auction houses around the world and distributed to over 6,300 media organisations and international institutions every year in 7 languages – will focus particularly on China’s successful conquest of the global art market. Our 2011 Art Market Trends contain macro- and micro-economic analyses providing the keys to understanding the annual evolution of the global auction market. It discusses the major trends in the market, analysed throughout the year on the ArtMarketInsight page of our website, by the Artprice press agency and by our Econometrics Department. To complement this objective appreciation of the art market based on a year of global auction results, Artprice also offers numerous original rankings such as the Top 500 artists by auction revenue and the Top 100 auction results of the year. 2011 Fine Art auction sales revenue Breakdown by country United Kingdom 19,4% France 4,5% Germany 1,8% Switzerland 1,4% Italy 1,2% China 41,4% USA 23,6% Others 6,7% © artprice page 5 ART MARKET TRENDS 2011 A high-end market unaffected by the crisis With the subprime crisis giving way to the debt crisis, the economic record for 2011 was particularly bad in the Western world, marked by colossal debt ratios in Greece, Italy, Spain, Portugal and the UK, a destabilization of European monetary union and swelling public debt in the USA. The downgrade of the USA by Standard & Poor’s this year broke a taboo marking the end of the chapter representing the American model since 1945. The debt crisis and subsequent austerity policies have had catastrophic repercussions. After the summer, the recession in Europe led to the amputation of cultural budgets and subsidies. In the UK for example, cultural resources were cut by 30% between 2010 and September 2011. Naturally, this unhealthy climate has resulted in collateral damage on the art market. Many galleries have suffered in Europe and some have closed shop. More generally, the art market has experienced a massive crisis of confidence following Rest Of The World Asia 13,4% 34,7% 12,1% 0,3% 1,4% 2,2% 13% 9,2% 75,3% 38,4% 2011 Auction sales revenue in Asia and the rest of the world Breakdown by price range > $1m $100 000 - 1 m $10 000 - 100 000 $5 000 - 10 000 < $5 000 © artprice page 6 the meltdown of financial indicators. Between late July and the end of September, while the S&P 500 announced drastic falls (loss of 17% between July 21 and August 22, then -5% in September), Artprice’s Art Market Confidence Index (AMCI) fell below zero for the first time since the first quarter of 2009. Concern over financial and economic developments upset confidence in the resilience of the art market. However, the anxiety only needed one strong signal from the market to be subdued, and confidence returned in October thanks to the success of the major Contemporary Art fairs (Frieze in London and FIAC in Paris) and, above all, after some stunning auctions results in the second half of the year. While Europe analysed its weaknesses and its economists contemplated the possibility of a collapse of the Euro, the art market was in full swing, including in Europe. Meanwhile, New York remained a stronghold of the art trade, particularly for the Contemporary segment, and the depreciation of the dollar made USA sales more attractive for European and Asian buyers . The debt crisis coupled with the turmoil on financial markets has driven numerous investors to fall back on art which has once again played its historical role as a value haven 1. New record year So in spite of the sword of Damocles hanging over the West, art in fact sold better in 2011 than at any other time in history with $11.57 billion in total global annual revenue, up $2 billion versus 2010, which already produced the best performance of the decade. This increase was not solely generated by the Chinese market’s 49% growth compared with 2010; it represented overall growth… including European. Indeed, the leading European auction markets posted strong figures: +24% in the UK ($2.24 billion in 2011 vs. $1.81 billion in 2010), +9% in France ($521 million vs. $478 million in 2010) and +23% in Germany ($213.9 million vs. $174 in 2010). In the Top 5 market places, only the USA contracted with a revenue total of $2.72B, down 3% vs. 2010. In 2011, the high-end market displayed an extraordinary dynamism. No fewer than 1,675 artworks sold above the $1 million threshold (including 59 above the $10 million threshold) representing a 32% increase of 7-figure (or more) auction sales versus 2010 and an increase of 493% versus the start of the decade! And it comes as no surprise that China posted by far the best national score with 774. Indeed, Hong Kong posted twice as many million-plus results as the entire Euro area! Further evidence of this exceptional health: the year saw no less than 12,400 new auction records for artists (excluding auctions debuts). The powers at work The results of 2011 confirmed China’s domination of the art market, with the economic health of Asian collectors generating higher price levels than anywhere else in the world. China has established itself for the second consecutive year as the first global marketplace for the sale of art. This is all the more surprising when one considers the transaction statistics: China accounts for just 10.8% of global volume compared with nearly 15% in the USA and nearly 16% in France. Today China’s offer in terms of transaction volumes is roughly the same as the UK’s. However, its 1 Certain investors are using the term SWAG: silver, wine, art, gold. page 7 ART MARKET TRENDS 2011 revenue from that offer is equivalent to double the entire revenue from European art auctions! (China: $4.79B, UK: $2.24 billion). With 41.4% of global art auction revenue, six artists among the world’s Top 10 1and fi ve of the top 10 cities for art sales in the world, China is winning market share from the USA whose annual output of $2.72 billion represented 23.5% of global art sales in 2011 compared with 29.5% in 2010. The UK maintained its third place with $2.24 billion and 19.3% of the global market and France kept its fourth place ($521 million) but lost competitiveness on an increasingly high-end 1 Zhang Daqian, Qi Baishi, Xu Beihong, Wu Guanzhong, Fu Baoshi and Li Keran. See Top 10. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $7b $6b $5b $4b $3b $2b $1b Fine Art auction sales revenue Breakdown by semester (2000 - 2011) © artprice com 1 st half 2 nd Half page 8 market. Art sales in France represented 4.5% of the global market versus 5% in 2010, despite an increased volume of transactions. And Paris, the auction capital of France, is relegated to fi fth position, largely overtaken by Hong Kong (which has become a very high-end market) and closely followed by Shanghai. In the auction world, Christie’s and Sotheby’s still represent the lion’s share generating almost half the total volume of global art business. New York and London are their main markets and Hong Kong has become their third stronghold 1. If London and New York have lost none of their cachet or their vitality, they have lost market share, not because they sell less but because the Asian auction houses are growing more aggressively. The combined forces of Christie’s and Sotheby’s represented 47% of global art sales in 2011. However in the early years of the millennium they accounted for over 73% of global art auction revenue. The redistribution of forces that has taken place in recent years is a consequence of the major economic and cultural upheavals of Asia’s demographic giants. Until the late 20th century, the omnipotence of the European and American art market was based on an old tradition, that of the art collection, including the collection of works by Contemporary artists. This is not the case in Asia and especially China where the thirst for collection is a very recent phenomenon, which really took off in the 1990s. That is when Chinese auction companies began offering specialized sales in painting and sculpture. China Guardian started in 1994 with the fi rst 1 Christie’s generated $341 million in Hong Kong in 2011 and $1.126 billion in New York while Sotheby’s posted $405 million in Hong Kong and $1.237 billion in New York. 2011 Fine Art auction sales Breakdown by Auction House Sotheby’s 4% Christie’s 7% Poly International China Guardian 2% 1% Others 86% Auction Turnover Lots Sold 25% 23% 8% 8% 37% © artprice com page 9 ART MARKET TRENDS 2011 sale of painting and sculpture. Today it is the third auction company in the world generating $901.8 million from art sales 1and 7.79% of the world’s art auction revenue from a small proportion of the global volume of transactions (only 2%). The Beijing based China Guardian can boast the highest bid of 2011 after selling Qi Baishi’s Eagle Standing on Pine Tree, Four-Character Couplet in Seal Script for ¥370 million ($57.2 million) against an initial estimate of ¥88 million on 22 May 2011. This is the world record for a work of Modern Chinese art. In Beijing, the auction companies in competition with China Guardian include Poly International, ranked fourth globally (with $901.6 million in 2011), Beijing Council, fifth globally (with $298 million representing 2.58% of transactions) and Beijing Hanhai, ranked seventh after Phillips de Pury & Company. Indeed, Beijing is where the market’s pulse beats strongest now, generating over $3.17 billion in annual revenue, representing more than 27% of global art auction revenue. Behind Beijing there is New York ($2.593 billion), $380 million ahead of London with $2.214 billion and then Hong Kong, which has climbed to fourth place with $796m, representing nearly 7% of global art auction revenue. Sotheby’s has confirmed its leading position among the auction houses located in Hong Kong (over $405 million in 2011), ahead of Christie’s ($341 million), Asian Art Auction Alliance, Larasati, Chinese Paintings & Art Auctioneer, Sino Art Auctioneers Ltd. and Sanobocho Art Auction. In competition with Beijing, Hong Kong has become Asia’s most attractive spot for the big players in the art market. Its freeport status offers a number of advantages for the international exchange of artworks, including no tax on import or export, strict banking secrecy, more liberal regulations than Beijing and Shanghai and a strategic location for easy access to the entire Southeast Pacific region, facilitating visits of Australian, Korean, Taiwanese and Japanese collectors. A number of Western gallery owners have set up in Hong Kong including the Gagosian (which opened in early 2011 with a Damien Hirst show). Edward Malingue opened his first gallery there, and the White Cube (London), Emmanuel Perrotin (Paris) and Artprice (Lyon) are all in the process of establishing footholds on the island. After Beijing and Hong Kong, three other Chinese cities also rank among the Top 10 global marketplaces: Shanghai ($374 million in 2011), Hangzhou ($185 million) and Jinan ($116 million). Modern art: the core of the market in 2011 Modern art is currently the heart of the global art market. It is the densest (10 times the Old Masters segment in terms of volume) and most profitable segment. 2011 was the best of the decade for the sale of modern works with particularly strong demand (more than 164,000 works sold, a record for the decade) and an outstanding revenue total of $6.067B, representing 52.4% of total global art auction revenue (all artistic periods combined). In 2011, the revenue from Modern art was up $1.218 billion versus 2010 which was itself a record year! Here too, China made the difference. The leading marketplace for the sale of Old Masters and Post-war art, it also largely surpassed the rest of the world in Modern art. Today, China accounts for nearly half the global market of Modern art in revenue terms. Underlying this trend are the rocketing prices of Chinese Modern 1 Fine Art only, 2011. page 10 artists. If we analyse the Top 10 artists ranked by turnover, the top 2 are Modern Chinese masters whose performance exceed those of Andy Warhol and Pablo Picasso by several tens of millions of dollars. Moreover, the best of Modern Chinese art is collected in China and the most expensive works sell at auction houses in Beijing and Hong Kong. Old Masters like Qi Baishi, Zhang Daqian and Xu Beihong now largely exceed the $10 million threshold with their finest works. Qi Baishi, who was the first Chinese artist to win the famous Top 10 artists (in 2009), signed the best result of 2011 at $57.2 million. As for Zhang Daqian, whose works generated $550 million in 2011, he is not only at the head of the 2011 Top 10, but he also generated the alltime best artist’s annual sales revenue! His highest bid during last year was $21.8 million for Lotus and Mandarin Ducks on May 31 (Sotheby’s Hong Kong). Besides the Chinese masters, the best results in the Modern segment rewarded Pablo Picasso, Gustav Klimt, Egon Schiele, Claude Monet, Maurice de Vlaminck and Salvador Dali who all signed some of the year’s best results (all periods combined). Picasso’s La Lecture, a small format painting (65.5 x 51 cm) representing Marie- 2011 Auction sales revenue in Asia and the rest of the world Breakdown by period Old Master Rest Of The World Asia Modern Art Post-War Contemporary XIX th Century 13% 8% 13% 4% 54% 51% 10% 25% 10% 11% © artprice page 11 ART MARKET TRENDS 2011 Therese Walter, fetched £22.5 million on 8 February vs. an estimate of £12-18 million ($36.2m, Sotheby’s). This was Picasso’s best result of the year and the global seventh best auction result. The next day, Christie’s scored a new record with Saldavor Dali’s Study for ‘ Honey is Sweeter than Blood’, which fetched £3.6 million ($5.8 million). This small canvas, painted between 1926 and 1927 (37.7 x 46.1 cm) is a “transitional” work employing some of the key themes in Dali’s later paranoia-critique vocabulary. It beat a record signed in May 2010 for Spectre du soir sur la plage dated 1935 which fetched $5 million at Sotheby’s. However, Sotheby’s took its revenge on 10 February 2011 when Portrait of Paul Eluard (1929, 33 x 25 c million) sold for £12 million (nearly $19.3 million) against an estimate of £3.5 million - £5 million. Another record was established when Pierre Bonnard’s Terrace at Vernon (which he himself regarded as a particularly accomplished work) fetched £6.4 million ($10.3 million) on 9 February at Christie’s, doubling its estimated price range. With over-inflated optimism, the two leading auction houses over-estimated the market for their Impressionist & Modern Art sales in New York on 3 & 4 May. Sotheby’s posted a total of $149 million (excluding fees), beneath its low estimate, while Christie’s followed the curve the following day with a total of $136m, versus a high estimate of $277 million and a low estimate of $162 million. Christie’s result on that day did not even represent half of that generated by the same sale in 2010, a year earlier ($296 million). Nevertheless, a number of superb results were recorded including a record for a Paul Gauguin sculpture at $10 million ( Jeune Tahitienne, on 3 May, Sotheby’s) and a record of $20 million for Maurice de Vlaminck. His Paysage de Banlieue with Fauvist colours (1905) added $9 million to his previous record of €9.4 million for Les pêcheurs à Nanterre (Loudmer Paris) on 25 March 1990. Another work that actually exceeded the estimates was Henri Matisse’s La Fenêtre ouverte fetching $14 million (est. $8 million - $12 million) on 4 May. The following month, a rare urban landscape by Egon Schiele entitled Hauser mit bunter wäsche (Vordatdt II) (Houses with laundry Suburb II) found a buyer at £22 million ($35.6 million), generating the best result of the London June sales (Sotheby’s, 22 June). However, it was not a case of everything selling at any price and not even in the case of masterpieces with superb pedigrees. For example, Claude Monet’s Nymphéas with Beyeler Gallery provenance, the star lot of the Christie’s sale on June 21, was bought in against a prohibitive estimate of £30 million - £40 million. Admittedly, in 2008, his Bassin aux Nymphéas shot to £36.5 million ($71.8 million); but that outstanding result ‑ adding £12 million to its high estimate ‑ occurred in a period of intense market euphoria. Remember that on 23 June 2010, another of Monet’s Nymphéas paintings failed to sell at Christie’s when offered at £17 million - £24 million. The best of the Old Masters The Old Masters market has doubled in value in two years. The peaks reached in the Old Masters segment (whose market is very contracted for Western signatures) were largely, here too, generated by the rebalancing of the Chinese art market towards other segments. China is in fact the champion for sales of Old Masters (its market is by far the densest) with a total for the segment of more than $704 million in 2011 vs. $248 million in the UK, $128 million in the USA and $46 million in France. After the Modern Qi Baishi, the artist with the best annual auction result was page 12 indeed the Old Master Wang Meng. His ink on paper Zhi Chuan moving to Mountain fetched ¥350 million ($54 million) on 4 June 2011 at Poly International. This Chinese artist from the Yuan dynasty is now the second most expensive Old Master on the global market after Pierre-Paul Rubens 1, dethroning the famous drawing Head of a Muse by Raphael that had held second place since 8 December 2009 ($42.7m, Christie’s London). After Wang Meng, Francesco Guardi clinched the second best result of the year in the Old Masters segment with a broad view of Venice entitled Venice, a View of the Rialto Bridge, Looking North . The impressive background of the work, detailed in 32 pages of the Sotheby’s catalogue, lent substantial support to the estimated range of £15 million - £25 million. Lot no. 73 (the last in the sale), Guardi’s cityscape fetched £23.8 million breaking a previous record that had stood unbeaten since 1989 ( Vue de la Giudecca et du Zattere à Venise, £8.9m, Sotheby’s). Third on the Old Masters podium in 2011 was George Stubbs’ Gimcrack on Newmarket Heath, with a trainer, jockey and stable lad which doubled the artist’s previous record with a winning bid of £20 million ($32.15 million) at Christie’s on 5 July 2011. The painting of Gimcrack, one of the racing world’s most admired horses of the 18th century (28 victories in 36 races) depicted in a complex pictorial construction and 1 The Massacre of the Innocents fetched £45m, ($69.5 million) at Sotheby’s on 10 July 2002. Lots sold in 2011 in Asia and in the rest of the world Breakdown by medium Painting Print Sculpture Drawing PhotographyO thers 0,2% 4,8% 0,4% 1,6% 2,3% 6,5% 8,3% 20,6% 67,6% 21,8% 21% 44,3% Asia Rest Of The World © artprice page 13 ART MARKET TRENDS 2011 bathed in a subliminal light, generated nearly half the revenue total (£43.5 million from 42 lots) at Christie’s Old Masters & British Paintings sale of 5 July 2011. Representing just over 10% of global art market revenue in 2011, the Old Masters segment is a strategically important one. However, unfortunately the supply in the West has become incredibly scarce whereas Asian auction rooms are filled to the brim. To mitigate this structural deficit, European and USA auction houses have every incentive to re-focus on Contemporary art, which has become a more profitable segment than Old Masters (2011 sales revenue for Old Masters amounted to $1.198 billion compared with $1.261 billion for the Contemporary segment). Contemporary art 1 The number of contemporary works of art sold has more than tripled over the decade. In 2011, more than 41,000 Contemporary works sold worldwide, a record number which generated a revenue total of over $1.26 billion compared with $87.7 million in 2001. Contemporary art certainly has the wind in its sails, but it has not become unaffordable since 62% of Contemporary works sold for less than $5,000 in 2011. However, prices are rising and the market’s high-end accounts for an increasingly large share of the total Contemporary art market. In fact 2011 was marked by no fewer than 1,879 bids above $100,000, five hun dred more than in 2010. With annual revenue of $540 million in 2011, China shot right past the USA ($310 million), the usual number 1 in this segment: in the first half of 2011, Beijing became ‑ for the first time in art market history ‑ the world’s second marketplace for Contemporary Art auction sales, just behind New York and ahead of Hong Kong. Sales in the second semester confirmed the trend: it is now China that sells the most Contemporary art in the world and China also appears to be the market where supply and demand for Contemporary works are most appropriately matched. Hong Kong and Beijing have emerged as true champions with lower unsold rates than the West (21.3% in Beijing and 21.8% in Hong Kong vs. 25.8% in New York and 34.8% in London). Among the top-ranking Contemporary artists in the world, Zeng Fanzhi, Zhang Xiaogang, Chen Yifei and Zhou Chunya provide merciless competition for American artists like Jean-Michel Basquiat, Richard Prince and Jeff Koons, as collectors who attended the first Ullens sale on 3 April 2011 were able to witness for themselves. The sale of part of the collection of the great Belgian industrialist and art collector Guy Ullens Schoten was one of the highlights of the year. In fact, Sotheby’s had the best season in its Hong Kong history partly because of it. The American company posted a total of $167.9 million in April (from 705 lots sold in Hong Kong during the month) of which $46.679 million (excluding fees) from the 104 lots sold (out of 105!) at the Ullens sale. The sale produced new records for Hong Yu, Song Yonghong, Xie Nanxing, Wang Xingwei, GuanWei, Liu Wei, Geng Jianyi, Yu Youhan and Zhang Peili. The sale’s star lot, the triptych Forever lasting Love (1988) by Zhang Xiaogang, fetched HK$70 million ($9 million), the best hammer price ever struck for a Chinese Contemporary artist! This score of $9 million overtook Zen Fanzhi auction record of $8.6 million for his painting Mask series 1996 No.6 (HK$67 million) generated at Christie’s Hong Kong on 24 May 2008. 1 Traditionally, the period covered for the analysis of the Contemporary art market concerns artists born after 1945 and includes the very latest works created by living artists. The quality of the works attracted not only Asian collectors but also many foreign art buyers. There is still plenty of price headroom for Chinese Contemporary artists since Zhang Xiaogang is still far behind the four highest-ranked living artists of the past decade: Lucian Freud ( Benefits Supervisor Sleeping, $30m, 13 May 2008, Christie’s NY), Jasper Johns ( Flag, $25.5m, 11 May 2010, Christie’s NY), Jeff Koons ( Balloon Flower (Magenta), $22.9m, 30 June 2008, Christie’s London) and Gerhard Richter. On 14 October 2011, Gerhard Richter signed a spectacular result with his painting Kerze (Candle) which already looked expensive carrying Christie’s estimate of £6 million - £9 million. However, the auctioneer was right, because the final bid came in at £9.3 million ($14.6 million). The major retrospective of the German artist’s work at the Tate Modern in London at the time of that sale ( Gerhard Richter: Panorama – 6 October 2011 to 8 January 2012) undoubtedly made a positive contribution to the level of demand. That extraordinary result gave the artist eighth place in the 2011 Top 10 artists by auction revenue. Another test of the Contemporary market was the sale in October (12 -14) of 23 works by Damien Hirst in London. Only three works were bought in and the best pieces found buyers. The year’s best result for the standard bearer of the Young British Artists was generated by a Spot painting entitled Dantrolene which sold above its estimate at £950,000 ($1.5 million) on 29 June at Sotheby’s. Recall that Damien Hirst’s works proved a particularly sensitive barometer during the market contraction in 2009 when the artist’s auction revenue dropped to a fourteenth of his 2008 peak. The artist who gained the most from the 2006-2008 bubble with no less than 65 auction sales above the $1 million threshold in 2008, generated no more than 2 in 2009 and 9 in 2011. Structural mutation: the art market in the Internet age Today, with 2.7 billion people connected to Internet and a billion new users expected for 2012, the old system of physical auction rooms is increasingly being replaced by online sales. Some auction companies (including Heffel, Saffronart, Christie’s and Sotheby’s) have developed online trading platforms that have been Unsold lots: Asia vs the rest of the world Annual rates of unsold lots 2006 2007 2008 2009 2010 2011 34% 22,5% 34% 19% 40% 28% 40% 24% 38% 22% 37,5% 21,5% Asia Rest Of The World © artprice page 15 ART MARKET TRENDS 2011 operational for several years and Christie’s posted a 29% increase in its online auction revenue in 2011vs. 2010. The sale of artworks online has become an irreversible aspect of the modern art market and the sums involved have already reached into 7 figures. In fact, the history of the art market – like all markets – is naturally heading towards the circuits that are the fastest
Posted on: Tue, 17 Sep 2013 14:21:15 +0000
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