With news that house prices are once again rising out of control, that they need regulating and that a new bubble is forming, should we be concerned about the art market?
In this particular case what I mean by the art market is the very top end. The end reserved only to the top 1% of the world’s population. Just last month the New York branch of Christies held an auction that took almost 745 million dollars (Approximately £450 million sterling). Making it the highest grossing auction ever!
In the past such highs, such records have always come before a fall and it may be worth keeping an eye open for signs of a fall. Like most economic trends the art market is very much cyclical seeing drops fall in the 1990’s the 1970’s and during the Great Depression at the end of the 1920’s when many established Victorian and Edwardian artists whose art were breaking the records of their time crashed enormously, inflated initially by the types of auction we saw at Christies last week
Marc Quinn’s, sculptor of Kate Moss outside Christie’s New York which sold for $1.3million
The art market seems to have survived the latest crash, buoyed by investors from emerging markets in the Middle East, China and the newly wealthy looking to build collections. Another factor in all this seems to be a growing trend to guarantee the art coming to auctions, it transpires that 40 of the 72 lots on offer last week had already in theory been sold.
These guarantees cement high prices for the works of art pre-sale and prevent those works (and the artist) failing to sell looking weak in the eyes of the market. If the sale goes over the guarantee then the piece is sold to the highest bidder while the party who placed the guarantee gets a cut of the sale. This practice although not new is becoming increasingly common and threatens to artificially market prices. On the other hand, it also protects investment and does stave off market crashes and benefits us all across the entire art world. This practice is really no different to other measures imposed on the housing market, the banks and other sectors to try and ward off financial hardship.
Despite the warning I gave earlier, I don’t think we’ve seen the last of these records or market highs just yet. The art market having survived the latest economic downturn relatively unscathed appears even more appealing to those looking to invest.
Here at George Thornton Art we may not quite be selling our works to the 1% of society (yet), but a number of our artists, such as Kate Brinkworth and Laurie Williamson are already selling through auction houses. As in all areas, the artists we sell are driven by the fashions coming out of the top end of the market and the gallery thrives on a new breed of art fair, where buyers reflect and mirror the trends established at these types of events. Hopefully the art we deal in the gallery today will be tomorrows masters.
Artwork on line and available in the Nottingham gallery – 12A Flying Horse Walk, Nottingham, NG1 2HN