3 November 2009
Over the past few years, we have seen the global art market grow and gain momentum. This was supported by the enrichment of societies, and thus by the growing potential for the development of this method of investment. Multi-million sales of works of art by the world’s rich and outflated have triggered a wave of articles commenting on the growing role of wealthy collectors in the international market. What about the art market in the face of the global recession? Have the times when works of art were caught in exciting auctions gone by for ever? Can we expect a serious meltdown in the art market?
The situation on the global art market, especially in the United States and Great Britain, deteriorated. It has been noted that in western auctions the work of the great classics did not reach the reserve price, or simply did not succeed in selling it.
The world’s largest auction houses have been hit very hard by the economic downturn, dramatically reducing their spending and employment. According to Piotr Wiaderek, President of Wealth Bay, a company which invests in works of art, the crisis on the global financial markets has also had a negative impact on the global art market. However, the crisis has not been as deep as in the financial markets. Prices of so-called recognised works of art fell moderately, while many of them kept their prices,” he adds.
The dynamic growth of foreign art markets, together with the advent of the global economic crisis, significantly slowed down. In the West, the economic crisis has already been very clearly translated into the sale of art, but the art market there? the contemporary art market in particular? has long been a speculative bubble. Hence, the current price correction and reduced interest of customers of auction houses in London or New York – admits MichaĹ‚ Chomka, President of New World Art Collectors.
Will the global art market pass the test?
The biggest turnover on the international art market is recorded by Great Britain (35.7%) and the United States (35.6%). New emerging markets with a clear upward trend are also noticeable, such as the China market, which is growing at a high pace, and the China market is growing at a high pace: Russia, India, Middle East.
It is worth noting that the two largest and most valued auction houses in the world, Sotheby’s and Chrisitie’s, which are based in many countries of the world, including Rome, Toronto, Amsterdam, Hong-Kong and many others, only in New York and London record the highest revenues from trade in works of art.
So far, the biggest increase has been made in the United States. This was the result of a very dynamic economic development, as well as a favourable state tax policy, which introduced numerous legal facilitations in the trade of works of art. It is not surprising that there has been a continuous increase in the price of works of art.
Source: Report: Art market trends 2008.
The largest shares in the international art market belong to the next, after the USA, market leader – Great Britain. In this respect, it completely outclasses the other countries of the European Union. According to the Art market trends report, the UK was one tenth of a percentage point ahead of the US last year.
Developed art banking services for the most affluent customers, various types of consultancy and agency in purchasing works of art create here friendly conditions for collectors and investors, who can count on professional assistance in creating their own collections. Many banks introduced art banking services there, e.g.: “The Bank of Poland”, “The Bank of Poland”, “The Bank of the History of Polish Banks”, “The Bank of Poland” and “The Bank of the History of Polish Banks”: UBS, ABN AMRO, Deutsche Bank, Citigroup, JP Morgan. Trade in works of art in the UK is treated as an important pillar of trade, from which the state budget is financed.
In the global art market, two auction houses still hold an absolutely dominant position: Sotheby`s and Christie`s. These two companies have practically monopolised the circulation of the most valuable works. Both auction houses accounted for 73% of the total art trade in 2008. Their condition has been seriously affected by the crisis. They forecast that sales of works by contemporary artists will be much lower in comparison with the previous year. Buyers themselves are now also more cautious, and impulse shopping is rare.
It should be stressed that especially in the segment of contemporary art a sharp correction of prices was noted. The current weakness is not as serious as it was in 1990, when prices of contemporary works of art fell by as much as 40%. According to Piotr Wiaderk, this situation has been greatly influenced by the significant increase in the prices of works by contemporary artists in the last dozen or so years. supply on the global market generated by collectors or galleries forced to cash in part of their collections, thus often giving a unique opportunity to buy rare works of art to investors on the demand side – adds Wiaderek.
Prices of multiple works of art
The art market on the target of the global recession Finanse osobistepl saving investing shares
3 November 2009