If auctions are the best indication of market buoyancy and the health of the global art market, the art world is in a very good place indeed. Sales at premium auction houses this year, including Christie’s debut auction in Mumbai this December, have been hugely successful and many have smashed records.
Most auctions have been set in New York, long considered the world capital of the business, but auction house officials confirm that recent price spikes were driven in part by wealthy collectors entering a progressively more global market.
The 2013 spring auctions ended on a record-shattering high with Christie’s May post-war and contemporary art sale fetching $495 million, the highest total in the history of art auctions.
November was again a historic month with Irish-born painter Francis Bacon’s ‘Three Studies of Lucian Freud’ fetching $142.4 million, setting a world record as the top auction price ever. The same sale set the record for the most expensive work by a living artist when it sold Jeff Koons’ giant steel sculpture ‘Balloon Dog’ to an anonymous telephone bidder for $58.4 million. Andy Warhol’s ‘Silver Car Crash (Doubled Disaster)’ at Sotheby’s (which held the biggest auction in its history in November 2013) sold for $105 million, a new record for the late pop artist.
Exploring new “emerging” markets, major auction houses are now spreading their operations and showing art beyond traditional centres such as New York and London and heading for cities like Dubai, Shanghai, Moscow and Mumbai. Previews of auctions are attended by collectors, investors, speculators and art aficionados who are becoming increasingly better informed about quality and the values of art works.
Mumbai was a good example of this — Christie’s live debut auction in Mumbai fetched $15.45 million, more than double the expectation. “Our recent auction in India showed that there is a growing appetite amongst collectors for top quality works with exceptional provenance,” says Sonal Singh, Christie’s head of sales in Mumbai.
Auction houses have to consider historical context, cultural traditions and political and economic factors before the process of selection of art works for the sale. Christie’s Mumbai event saw national art treasures and non-exportable art works being offered for sale among the 83 lots.
India’s overall economic growth has slowed to under five percent from more than eight percent in the previous decade, but the country added more millionaires than most other BRIC (Brazil, Russia, India and China) and Asian countries. The rising number of new rich in India is good news for the high value art market. Investors in the new and thriving markets around the world include China, India, Russia, Turkey and the Middle East countries where the newly-minted billionaires are based. Experts suggest that the emergence of China as a global player in the art market is one of the biggest transformations in the last few years.
Investment, prestige and nationalism appear to be the motivation for art collectors in these regions. Investors may choose art over poorly performing stock markets to maintain a more balanced portfolio of assets. With this ‘substitution effect’, it seems art is the preferred choice of investment for the new economies. A tangible asset, resistant to inflation and conventional market turmoil, very high quality art works has proven to be a recession-proof alternative investment.
Buying power in new economies has been strengthened by years of booming commodities prices. Traditional collectors with a high degree of connoisseurship are history; a new breed of affluent collectors from the emerging economies will play a crucial role in the art market, protecting it to some extent from the downward pressure it would have been otherwise subjected to had it been only dependent on the US and European economies.
For new art markets to grow organically, it is essential for the public and private sector to step in and construct a strong cultural and economic infrastructure within which an art market can be placed and thrive, one in which art becomes a crucial part of the national identity and heritage rather than being just about the sporadic skyrocketing prices that make headlines every few years.
The writer is a Mumbai-based art consultant