The art market is currently experiencing the most exciting, astonishing boom since the late 1980s, when Japanese buying forced the prices of art to unprecedented levels. Over the past year a combination of new wealth, greater public consciousness of art, the arrival of buyers from three newly rich countries—Russia, India and China—has pushed prices sky high.
In just two weeks in New York last month more than $722 million was spent on Impressionist, Modern and contemporary art (pp.45-47). The main thrust of buying is concentrated on the art of the 20th and 21st centuries, with contemporary art leading the field. Auctions are the most high-profile manifestation of the red-hot market but previous months showed that dealers are also profiting from the boom.
Contemporary art fairs took place in quick succession in October, with FIAC in Paris, Frieze in London and Art Cologne following each other with barely time to breathe. All reported excellent sales, even FIAC, which had been lagging behind the other fairs for a number of years. The organisers of Frieze said that £33 million of art changed hands during its five days, and many dealers sold out their stands on the first night (pp.54-55). While Art Cologne came third in the queue, collectors still found E40 million to spend at this vast fair (p.53).
The art of the past is also selling well, and great results have rewarded the best of the best, particularly in single-owner sales. Christie’s sold the collection of Antonio Champalimaud, a Portuguese financier with highly conventional taste, for £38.9 million ($68.5 million) in July. Last month the Safra sale totalled $48 million for traditional furniture and objects (p.47).
Is this a bubble? According to the London contemporary art dealer Gerard Faggionato: “The difference between today and the late 1980s was that then, it was based on borrowed money. Today people are spending their own money. I do not see it ending soon”.
His words seem reinforced by the latest news that Goldman Sachs has already set aside $9.2 billion in bonuses for its employees this year. Michael Karp, co-founder of Options Group, an international headhunting and strategic consulting firm, reports that bonuses can range from $20,000 to $20 million. “Some commodity and energy traders in the top tier banks can expect $10 million plus,” he says. Meanwhile, newly rich Russian, Chinese and Indian buyers are vigorously pursuing their own artistic heritage. As Christie’s honorary chairman Christopher Burge said after the firm’s November Impressionist and Modern art sale, “I think the market still has a lot of steam. It doesn’t feel like a bubble”.
The writer is the Art Market editor.
Originally appeared in The Art Newspaper as ‘Boom or bubble'