The £111m splurged at an auction of Damien Hirst pickled sharks, medicine cabinets and dot paintings in September – the day Lehman Brothers went bankrupt – always seemed set to be the art boom’s last hurrah. And so it proved.
Contemporary auctions in London last month raised barely half of their pre-sale minimum estimates. Then the gloom spread to this week’s autumn sales in New York; three impressionist and modern art auctions by Sotheby’s and Christie’s earned 46-65 per cent of their low estimates. High-end estimates that these sales, plus contemporary auctions next week, could pull in $1.7bn now seem relics of a different era. If these auctions are any barometer, the mercury is falling fast.
Sotheby’s shares, a leading indicator for the art market, have slid 85 per cent in 12 months - a bigger decline than in 1990, before the last bubble burst. There is some hope the broader market pullback might now be less precipitous: Art Market Research’s Art-100 index, a broad measure of selling prices, fell 60 per cent peak-to-trough in the early 1990s. At that time, the top end was supported almost entirely by Japanese buyers; when Japan’s economy slumped, so did the price of artworks. Today’s art world is more globalised – though so is the downturn. Hopes emerging market tycoons would keep it afloat took a knock in disappointing contemporary auctions in Hong Kong and Dubai last month.
Still, speculative capital’s exit may at least lure back old money and “genuine” collectors. Recessions are, in theory, fine times to build art collections – if sometimes less so in practice, since only forced sellers will part with the really good stuff. Top-quality pieces by artists whose work comes up rarely will always find a buyer. Kazimir Malevich’s 1916 Suprematist Composition, for example, still pulled in a record $60m on Monday. But contemporary works, especially by younger artists whose place among history’s greats is not secured, are only for the daring. That bodes ill for next week’s contemporary sales.
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