Source – CCTV

The post Art world braces for effects of market meltdown first appeared on Indian Art News.

The stratospheric state of the global art market has been underlined by figures that show last month’s ‘Monet’ auction at Christie’s in London was the most lucrative in European history.

Despite the global economic slowdown, Christie’s evening sale of Impressionist and Modern Art fetched £144 million.

Of that total, £40.9 million was accounted for by the sale of Claude Monet’s Le bassin aux nymphéas, from the Frenchman’s waterlily series.

That was a world record for a work by the artist at auction – almost doubling the previous record of £21 million, set earlier this year at Christie’s for Le Pont du chemin de fer á Argeneuil.

Humble motorists are effectively paying at the pump for the rocketing price of top works, art market analysts believe.

Controllers of Middle Eastern sovereign funds and Russian oligarchs are the new power brokers, they say.

That seems to have been born out by the £44 million Sotheby’s sale in May of Francis Bacon’s Triptych (1976) – the highest price ever paid for a work of contemporary art at auction. It was apparently sold to Chelsea FC owner Roman Abramovich.

Although the billionaire has not confirmed the purchase, it is thought he bought it for his young girlfriend Daria ‘Dasha’ Zhukova.

She is in the process of setting up a major new art gallery, the Garage Centre for Contemporary Culture Moscow, or CCC, due to open in September.

Another world record to be smashed this year is the £17.3 million spent on a painting of a naked JobCentre worker by Lucian Freud, Benefits Supervisor Sleeping, the most ever spent on a work by a living artist.

The first half of 2008 has brought worldwide sales of £1.8 billion for Christie’s International, a 10 per cent increase on the same period last year. It’s Asian salesrooms have seen 63 per cent year-on-year growth.

Edward Dolman, chief executive officer of Christie’s International, said the figures reflected “the ongoing strength of the international art market.”

He added: “Collectors across the globe have remained active and confident, despite more uncertain economic conditions in some regions.

“Christie’s extensive international network has introduced an increasing number of buyers to the international art market from growth markets including Russia and the CIS states, the Middle East, India and China.”

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Is there a bubble in the art market? Sales of high-end works defy expectations amid an expanding pool of oil-rich buyers.

NEW YORK (Fortune) — Luxury these days is a tale of two markets: consumers continue to snap up high-priced Louis Vuitton bags even as they balk at paying full price for Coach handbags. The same can be said of demand for works of art.
Recent auctions of high-end art on both sides of the Atlantic have been a huge success. The sales, fueled in part by rich oil barons, have defied expectations that a shaky global economy would curb demand.
In London, works by Claude Monet and Jeff Koons fetched stratospheric prices, with Monet’s water lilies masterpiece, “Le Bassin aux Nympheas” selling for $80.5 million last week – well above its $47 million high estimate. In May, Francis Bacon’s “Triptych, 1976” set the record for most expensive contemporary work at auction when it sold for $86.3 million at Sotheby’s in New York.
Trendy categories like post-WWII and contemporary art have seen triple-digit price gains since 2002, but the boom was supposed to end after the credit crisis hit last summer. Instead, buoyant sales are just the latest example of a market that seems impervious to the downturn driven by climbing oil prices, a floundering financial sector, and a looming U.S. recession.
One reason the auctions are still buzzing is the influx of commodity-rich buyers who chase trophy works and push prices to ever-loftier heights. Roman Abramovich, a London-based Russian oligarch, reportedly bought two of the top works at the New York sales in May: the $86.3 million Bacon triptych and Lucien Freud’s “Benefits Supervisor Sleeping,” which sold for $33.6 million, making Freud the priciest living artist.
Meanwhile, the Al-Thani family of Qatar was the reported buyer last year of Mark Rothko’s “White Center (Yellow, Pink, and Lavender on Rose)” for $72.8 million. It was the highest price for a post-war work sold at auction at the time – a title now held by Bacon’s “Triptych.”
Signs of softness
This trophy-lot frenzy, however, has obscured some underlying weakness.
“We have two markets going on,” says Ian Peck, CEO of New York-based Art Capital Group, which provides financing against art assets. “There’s the super-rich market, which is very active right now. Then there’s the middle market, which is soft and patchy.”
According to research firm ArtTactic, works priced at more than $1 million made up about 70% of the contemporary art auction volume this year. Lower-priced pieces, which are offered by the auction houses at day sales rather than at the high-profile evening auctions, were more likely to sell below their top estimates or to fail to sell.
This softness shows that middle-market buyers are balking at rapidly escalating prices. For example, this week Christie’s featured six works by Damien Hirst at its day sale in London. Two didn’t sell, including a medicine cabinet that was estimated at $690,000 to $880,000. In its last auction four years ago, the Hirst piece fetched $212,000, nearly three times its top estimate.
The high-end market, on the other hand, has been resilient thanks to a buyer’s pool that is bigger and more global than ever. As recently as the late 1980s – when Japanese buyers bid up Impressionist art – American and European collectors were the only other major players, says Olivier Camu of Christie’s in London. When the Japanese economy faltered, so did the art market, and prices fell precipitously in the early 1990s.
“The reason the market is doing so well is because it’s so much deeper and broader,” says Camu. Big bidders now also hail from the former Soviet Union, the Middle East, and Asia.
With growing demand for a limited supply, quality has been able to command record prices. The $80.5 million Monet, for example, was a rare masterpiece in top condition whose companion paintings are in museum or private collections or, in one instance, damaged.
Still, observers question whether even the trophy-art market can continue to soar as economic conditions deteriorate. “We think if there is a shift it could happen quickly,” says Peck. “It would take one or two major pieces to do poorly, and that could trigger a chain reaction. It’s a very neurotic sort of market.”

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For the past two years 4% of the price of a work by a living artist sold through an auction house or by a dealer has been payable to the artist. Sales of less than €1,000 (£796) are exempt, and the tax is capped for anything worth €500,000 or more. Throughout the European Union the tax is payable on sales of works by living artists or those who have died within 70 years; in Britain it is only works by living artists that qualify. The EU allowed Britain this exemption until 2012. Mr Hirst and his colleagues would like to make sure it is not extended.

The image of the penniless artist starving in his garret makes for great opera but poor commercial logic. The artist’s resale right (ARR) benefits a far smaller proportion of artists than its supporters might assume. A study sponsored by the Antiques Trade Gazette showed that, in the 18 months to August 2007, 10% of the 1,104 artists benefiting from ARR in Britain (around half of whom are British) got 80% of the pot; the bottom 30% received less than £100 each. The royalty has also proved cumbersome and costly to collect.

Most serious is the effect that the extra cost of buying and selling might have on London as an art market. Collectors and curators flock to it twice a year for the auction season. They visit dealers and meet artists they might not otherwise have come across. But people who sell art at auction in London—and there have been more and more during the current boom—are only too aware that they can sell elsewhere: in New York, for example, Geneva or Hong Kong, where the Chinese contemporary market grew by nearly 1,000% between 2003 and 2006.

Adding to the cost of buying and selling art by extending ARR will ensure that more people receive royalties, but not many more. (The lion’s share in France goes to seven families; most of them are very well off, including the Picassos and the Matisses.) It will do little for London as an art-market centre—and still less for the quality of its art.

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The post Ultra-Rich Collectors Help Keep Art Market Afloat first appeared on Indian Art News.

If you’ve got a bruiser of a Francis Bacon on your drawing-room wall then you have probably grown used to its visual punch. You may not want an Impressionist next. However lovely a painting by Alfred Sisley may be, with its pointillist dots scattered daintily across the canvas, it will look like a wimp in a competitive arena.
This may be one of the reasons why Sotheby’s salesmen are so hopeful about the Expressionist canvases. A painting by one of the Fauves, for example – the short-lived, turn-of-the-century art group that took its name from the French word for “wild beasts” – will hardly fade into the wallpaper. The strident colours, the glaring designs, the dramatic brush work of André Derain or Maurice de Vlaminck can hold their own against even the brashest taste in interior decor. These are pieces with “wallpower”, as the art traders put it.
The market may be small but it is growing crowded. Chinese industrialists, Middle Eastern sheikhs and Indian entrepreneurs are battling against American tycoons and hedge fund investors. Then there are the Russian oligarchs. There are simply not enough great works to go round. We are running out of big names. Picasso may have been prolific, but he couldn’t supply today’s global market.
Yet the newcomers still want their showy brand labels. Forget musty Old Masters, lost in the yellowing mists of their chiaroscuro. Art is about prestige as much as paint. And many want a painting to have the same effect as a Porsche.
The contemporary, of course, can cater for that, but perhaps collectors are battening down the hatches. They want blue-chip stock. That may be why they are looking back to the classics. The Fauves may have been short lived, but at least they caused a commotion – and briefly included such A-listers as Matisse.
Of course, the great Modernist classics – Monet’s Waterlilies, for example – will always be coveted, but, rather than going for some third-rate work by this master of shimmering tranquillity, perhaps today’s collectors prefer the loud splash.

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The big June art sales, which start Tuesday in London, are expected by the auction houses to break more records as collectors from commodities-rich regions such as Russia and the Middle East emerge to fuel the decade-long boom in the art market.
Sotheby’s and Christie’s, the two main auction houses, together estimate they will sell about £400m ($790m) in artworks over 10 days at the sales of Impressionist, Modern and contemporary art. The boom in oil and other commodities is helping support the art market. Prices of artworks have continued to rise and Sotheby’s said that the number of new buyers in the art market was also rising. It said 21 per cent of its lots last year were bought by new buyers.
“Bidders from the Middle East, China, Russia and India have become twice as active, redefining the size and scope of the art market,” the auction house said.
“Five years ago, buyers who spent more than $500,000 at our auctions came from 36 countries. Last year they came from 58 countries . . . emerging markets have doubled the value of their bids in three years.”
Roman Abramovich, the London-based Russian oligarch, has emerged as a big collector, according to the Art Newspaper, which said he was the buyer in May of Francis Bacon’s “Triptych, 1976” for $86m – a record for a postwar artwork sold at auction – at Sotheby’s.
Christie’s kicks off the June season on Tuesday with its Impressionist and Modern evening sale, where it is offering a work by Claude Monet, “Le bassin aux nympheas”, one of the artist’s most significant water-lily paintings, which it expects to go for £18m to £24m. It is part of the collection of J Irwin Miller, an Indiana industrialist, whose 17-piece collection is being sold at Christie’s.
Among the highlights at Sotheby’s the next night are Gino Severini’s “Danseuse”, estimated at £7m-£10m.
The contemporary sales, which take place next week, are estimated to garner about the same value as the Impressionist and Modern works, reflecting a shift that has seen contemporary art become more popular.

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