During TEFAF I attended the 2010 Art Market Report given by Dr. Clare McAndrew of Arts Economics. Copies of the full report (170 pages with graphs and illustrations) can be acquired directly from TEFAF under Shop at 20 Euros plus postage.
Dr. McAndrew, who is a Cultural Economist, has chosen a most difficult area since figures can be less than precise and she tries to keep her theories of what is going on to a minimum. Most of the hard figures come from auction records and Clare is always looking for the ones she finds to be most reliable, especially when looking at the figures from China and checking that there is no Chinese government interference there. In spite of this she figures that 51% of the market comes from dealers with 49% from auction.
I was quite surprised when I walked into the lecture room that last year seemed less than half full but this year was Standing Room Only. There were lots of interested people and I believe mainly from the press. So you can be sure the international press will be referring to this report over the next year.
Clare explained that the past decade has been extremely volatile, going from extreme highs culminating in 2007 to a big big dip in 2009. From the data she has accumulated she believes that in 2010 it all began to level out with a few interesting changes in the total picture. China, which began the decade at virtually zero, ended quite high on the charts for art sales. The contemporary market is the largest segment of the art market, -- not a surprise - with global auction sales having reached 3.5 billion Euros last year. Of that total the largest segment was sold in the United States with 42%, the United Kingdom next with 21% and China - here was the surprise - third with 12%. France found itself in 4th place with 8% of the market leaving Germany further behind. This in spite of the fact that the order by country of high net worth individuals is the U.S., Germany, Japan and China. Adding another factoid into the mix, is that in the Chinese auction market the buy in rate is 43-45%.
Clare did a collector’s survey last year and learned that those considering themselves art collectors on average spent 7% of their annual income on art and antiques. When asked if it had been a good investment 75% replied it had. Whether the collectors were being totally honest or not, it is extremely interesting that this is the way the collector perceives his collecting and collection. It is a very positive and optimistic result that is music to the ears of an art dealer!
Another point that I found most interesting was that there was a major upsurge in the market but that volume of sales, i.e. pieces sold, went down. Dr. McAndrew explained that this showed, not that prices had gone up so much, but rather that the buyer had become more discriminating and that he or she was collecting only the best available, which always costs more. We must always beware of bargains, because as you know, if something is too good to be true…
Depending on which side of the pond you live on the following can be good or bad news. In an effort to level the playing field in Europe the EU (European Union) has insisted that all EU countries pay the same taxes on art, making it worth the cost of transport for any work of art valued at over $40,000 to be sent to New York.
Summed up it seems to all bode well for the art market in the United States over the coming year.
