Minal Vazirani, co-founder of the Saffronart auction house, sees it differently. “As with other asset classes, what’s happening is a search for top quality.” But she added: “Two years ago, there was a euphoric sense that you have to buy art, because it will go up. Now people are more grounded.”
A couple of years ago, almost every major auction sold 80-90% of its lots. That has come down to around 65-70%. “I think people are not as willing any more to bid as competitively on mid-quality as on top quality,” says Vazirani.
Price manipulation
At the same time, the subjective nature of the quality of art has begun to churn a frothy wake of suspicion about price manipulation. The manipulation works thus: To inflate an emerging artist’s prices, a gallery submits a single work for auction. It then buys back the work at a high price, either by itself or as part of a group of profit-minded backers.
Once such a precedent is set, other works by the same artist auction — or will even be sold by the gallery — for higher prices that are not always commensurate with quality. The artist, in turn, is committed to produce “a certain number of works or a specific yardage of work, allowing each of the backers to build up a collection of such work,” says Ranjit Hoskote, a Mumbai-based art critic and curator.
“This is how one artist, who sold a work for a couple of lakhs five years ago, is now able to auction works for crores,” says another curator who wished to remain unnamed.
Vazirani says authentic pricing information is difficult to obtain because galleries, artists and auction houses work so closely that there are cases of conflict of interest. One gallery owner, for instance, himself said he also works as an auction house consultant, blurring the line between vendor and auctioneer.
“Some artists have witnessed a very rapid jump in appreciation that simply isn’t justified,” another industry expert, requesting anonymity, says. “For emerging artists, an appreciation of 15-20% is fairly good.” In comparison, some artists’ prices have risen by more than 100% each year.
Inflated artists
Industry experts named specific inflated artists only on condition of anonymity. One art critic for a national newspaper says: “I would invite you to consider Jagannath Panda and Hema Upadhyay among the key examples.” Another expert named Gupta and Bharti Kher, whose works feature bindis pasted on metal sculptures and wall panels.
Panda’s highest sale price in recent times came in a March 2008 Saffronart auction, when a canvas estimated at $78,950 went for $353,625. His previous acrylic on canvas, of a similar size and estimate, sold for $83,375 in an auction September 2007, according to ArtNet, an online auction database.
Upadhyay’s works auctioned for an average of around $20,000 before March. In a New York auction in March, one work titled Killing Site, with an upper estimate of $30,000, sold for $61,000. Two out of her three works auctioned since then, in India and abroad, have yielded upwards of $130,000. The names of the buyers in each case were not publicly announced.