Sotheby’s employees hold a painting by Pablo Picasso called Tete de Femme at its auction rooms in London. Auctions of various art genres at Sotheby’s, one of the biggest international auction houses, scheduled for this month are smaller and carry lower estimates than its equivalent event last year. Photo: AP
Sotheby’s employees hold a painting by Pablo Picasso called Tete de Femme at its auction rooms in London. Auctions of various art genres at Sotheby’s, one of the biggest international
auction houses, scheduled for this month are smaller and carry lower estimates than its equivalent event last year. Photo: AP

Art world prepares for a challenging year

The collapse in oil prices and the Chinese slowdown have taken a huge amount of cash out of the art market

London: So now it’s official: The art market boom has peaked, according to figures from Christie’s and Sotheby’s, the biggest international auction houses.

In late January, the companies released their 2015 results, with each reporting a slight decrease in year-over-year sales.

It was the first year since 2010 that both failed to show an increase.

Christie’s, a private company based in London, reported auctions and private sales of £4.8 billion (about $6.8 billion) in 2015, a decline in pounds of about 5% from 2014. Equivalent sales at Sotheby’s, which is publicly traded and based in New York, were $6.6 billion, about 1% less than in 2014.

Those figures do not represent a burst bubble, but they do suggest that 2016 is going to be challenging for the art market, reflecting the volatility of the wider world.

“The froth has been skimmed off," said Paul Ress, chief executive of Right Capital, which provides loans secured by art to dealers and collectors.

Ress said the collapse in the price of oil had taken “a huge amount of cash" out of the art market.

“There aren’t so many Russians and Brazilians involved now, and the Chinese slowdown has had a knock-on effect on the raw materials and equity markets," he said.

“The potential buyers in the art world won’t be feeling as rich as they did last year."

Christie’s results reveal key shifts in the market in 2015. Bolstered by huge prices in New York for trophy works by artists like Picasso and Modigliani, auction sales of Impressionist and modern art were up 57% from 2014 to £1.3 billion (about $1.85 billion), while auction sales of postwar and contemporary art —the main driver of growth from 2009 to 2014—were down 14% to £1.5 billion ($2.1 billion).

Year-over-year sales of old master paintings, 19th-century and Russian art shrank 37% to £154.9 million (roughly $220.6 million).

“It’s a healthy correction," said Roman Kraussl, an associate professor of finance at the University of Luxembourg and co-author of “Is There a Bubble in the Art Market?," a research paper that tracked prices from 1970 through 2013, published in January in the Journal of Empirical Finance.

Owners, wary of a downturn, have become more reluctant to sell high-value works.

Sotheby’s and Christie’s February auctions in London of Impressionist and modern, as well as contemporary, art are smaller and carry lower estimates than their equivalent events last year.

Sotheby’s evening sale on Wednesday of Impressionist and modern art contains 54 works, compared with 75 last February. That 2015 auction grossed £186.4 million (about $265.5 million).

This week it is expected to raise at least £97.6 million (around $139 million).

The evening’s star lot is Tête de Femme, a 1935 Picasso study of his lover and muse Marie-Thérèse Walter. It has a low estimate of £16 million (about $22.8 million). Its current owner bought it at Sotheby’s in New York in November 2013 for $39.9 million.

On 11 February, at Christie’s evening contemporary sale, the auction house and a third-party financier are banking that the market for the Scottish painter Peter Doig is bubble-proof. Doig’s 1991 canvas The Architect’s Home in the Ravine is guaranteed to sell against a low estimate of £10 million (about $14.2 million), £2.3 million more than it brought at auction in London three years ago.

Overall expectations have also contracted at Christie’s.

The 62 lots of its evening contemporary sale have a total minimum valuation of £50.4 million ($71.7 million), almost half the low estimate the company placed on its equivalent 64-lot auction in 2015, which took in £117.1 million (about $166.7 million).

With investment-conscious buyers nervous about spending significant sums on works by artists without established reputations, the new category of “20th-century art," to which the Picasso and the Doig both belong, now dominates the market.

Sotheby’s and Christie’s both used the label “20th century" to promote their February sales. And Phillips, whose contemporary auctions used to be synonymous with the hottest emerging names, is holding its inaugural sale of “20th Century and Contemporary Art" in London on 9 February.

Adding big names from the last century, like de Kooning and de Chirico to Mark Bradford and Tauba Auerbach, helped Phillips realize $523 million in auction sales last year, a 34% increase over 2014.

But is the market for 20th-century art a bubble about to burst, just as the market for Impressionist art imploded in 1991?

Kraussl doesn’t think so, at least at the very top of the market.

“Art is now a must-have for the rich," he said. “Every collection has to have a Picasso, a Richter, a Warhol."

But he and many other people are less sure about the thousands of lesser-known artists.

“I think collectors will be focusing more financial attention on an older generation of artists rather than emerging contemporary," said Heather Flow, an art adviser in New York.

“I think most collectors, rightly so, have been confused about the price fluctuations of younger artists."

Rediscovered, rather than discovered, talent looks to be a recurring theme of a bearish 2016. On 22 January, the Italian dealership M&L Fine Art in London exhibited paintings by Angelo Savelli (1911-1995), a Calabrian-born artist who lived in New York and was influenced by Abstract Expressionism.

The works are priced from $27,000 to $163,000.

Buyers will be hoping that Savelli will be this year’s Paolo Scheggi, whose auction prices shot up from $353,617 in October 2013 to $1.8 million in May 2015.

Savelli’s current auction high is $91,764, set in 2007.

©2016/The New York Times

Close