Ten reasons the Contemporary Art Market won’t crash.

July 2014

 

What is contemporary art, in 2014? An object of beauty? Value? An instrument for social climbing? A weapon measuring the higher education of the boy one’s daughter has brought home? Or a thing we all fool ourselves to have some deep, dark, exotic meaning? Perhaps "thing" is the best word that can capture it all.

 

Flabbergasting the most renowned experts in this field, Christie’s legendary $744m contemporary art evening sale came just a day after the end of Frieze New York, where untold millions exchanged hands. So, where is the bottomless pocket of money coming from, and why is it being invested in art more and more?

 

Ten theories why the art bubble keeps inflating, and why it will be a while before it bursts:

 

1.There is only one art world

 

Art is subjective; x + y does not = z. Therefore, as a commodity there is nothing to compare it to; there is no “correct value” for a piece of art, but merely a price tag a consumer is wiling to pay. The expense is, to a certain extent, comparable to beauty; in the eye of the beholder, or, more realistically, in the number of zeros on her cheque.

 

2.Enough players to play the game/believe the hype


An increase in Chinese buyers at the Modern and Impressionist Sale in New York last May 2014 is just one example of culture cross-over due to vast number of players in the art world. The last time this happened on a massive scale was in the late 1980s when the Japanese speculators bought Impressionist Art - this bubble burst spectacularly in 1990/1991.

 

3.You’ve got to put your money somewhere

 

The rich are getting richer and the poor are getting poorer. Ultra high net worth individuals are always looking for savvy new ways to diversify their portfolio.

 

4.Art isn’t part of the real economy.

 

Though prices of houses may seem ludicrous, bricks and water will always have a limited value - albeit the 8 bed home and drop-away pool, complete with pool boy and desirable post code may be $100’s of millions- but even the wealthiest of property owners have to be able to see the potential value of return before purchasing lavish houses. Art is merely a subjective object of beauty, the price one is willing to pay for paint on a canvas really has no limits.

  

5.Superstar artists

 

We all believed the myth that is, to be a famous, and therefore a rich and successful artist, you'd have to die first, or, at the very least, chop of your own ear (although not recommended- even Van Gogh died in poverty). Whilst one should not feel stupid for believing this it can now be considered a forgotten theory of the past. For the very first time in art history we are witnessing the era of the superstar artists; a number of the record prices achieved at auctions are by artists that are still alive- Koons are selling for $55 million, Gerhard Richter for $36 million. No longer is the well renowned book, questioning, “Why Are Artist Poor?” by Hans Abbing relevant. Hirst, Emin, Kusama (etc) are all household names, so the question should now be “Why are all these artist rich and can this be sustainable?” 

 

6.The rise of the art advisors

 

Art Advisors are not a new concept, they have been around since Cicero letters to Atticus, circa 51-65BC .Yet since the crash of the Lehman Brothers 2007/2008 galleries and dealers went down under, subsequently consumers lost their confidence creating a gap and need for advice. The explosion of the art advisors in Mayfair, New York, and Singapore found themselves mediating between galleries and first time buyers or auction houses and ultra HNWIs who are time poor or prefer to remain anonymous.  In fact, dealing with restoration, curating, acquisitions, selling, gaining access to über V.I.P art fairs, and yacht parties are but a few qualities of the art advisor. You name it, the advisor will do it.

 

7.Celebrities

 

Hip-hop megastar Jay-Z raps about "f***king up his Warhol" and famously advises A-lister pals such as Harry Styles to invest in a Basquiats and Muriilos. In the same way, British footballers are now splurging their vast disposable incomes on Picasso artworks. Again, following in the footsteps of Jay-Z, who rapped last year about wanting “a Picasso in my casa.”

 

8.Art is innate - cavemen did it

 

Ever since our mum’s told us watching too much TV will make your eyes go square, we have been told to be creative or play outside. New borns are surrounded by colourful objects of inspiration from day one. My niece and nephew's collection of different creative tools such as: googley eyes; crayons; feathers; glitter, would put even Grayson Perry’s studio to shame. Of course, if you strip us back, away from large profit margins and mobile phones, and take us back to when man first walked this planet, evidence shows, between hunting and gathering, art was a fundamental aspect to our existence. Fashion and technology will come and go but art and creativity will always remain central to human existence.

 

9.Collecting is innate - your grandparents did it

 

As humans, we are possibly the only species on this planet who insist on accumulating anything from junk to jewels. Whether it is matchboxes, stamps, ornaments, or even girlfriends, this behavior of hoarding and collecting is the essential backbone to the art market and auction house business model.

 

10.Accessibility

 

Finally, the art world is, believe it or not, a lot more accessible than 10, even 5 years ago. Today, twenty-something first time buyers are finding their feet in the contemporary art market, auction houses are filling with average Joes off the street as opposed to high end art dealers, and even the stoney-faced gallery assistants appears less intimidating as tourists trail off the cosmopolitan streets to snoop around exhibitions. And, if worse come to worse, you can even pay the art advisors a handsome fee for this accessibility should you not have time or patience to do so yourself.

 

 

Currently, the art market is so strong spectators argue it will take an external event such as an economic, or geopolitical shock to undo the current boom. However, Anders Peterson, founder of Art Tactic argues, and I agree; “the undoing is likely to come from within the art world.” Put simply the force of the art market will be its own worst enemy as we see the following risks:

 

-Speculation/ investment from foreign buyers have a tendency of inflating the art market.

 

-Short-term investment. We are already witnessing this in the current market, with big time Saatchi-like dealers, flipping the works of young artists and leaving them out in cold, high and dry. 

 

-Fraud and faking art on a big scale. This is going to be an increasing problem as criminals see more potential. 

 

-Changes in taste and fissionability. We are a fickle bunch- take that brand new leather jacket, we swear we will have for the rest of our lives and we cannot live without it!? Or that shiny red Mustang? The new set of golf clubs?Whatever your vice, they somehow always finds themselves on the scrap heap.

 

 

The art bubble seems to be making plans to become bigger still, but as we all have learnt one way or another, all good things must come to an end, so it is only in my insist to assume it will all be over one day soon. Yet, whilst I do not believe there will be a typical crash in the art market like the ones in stocks, shares, oil, and real estate, I do feel the bubble whilst it will remain healthy, bulbous, and expensive, it will almost certainly reduce… only in order to revise its infrastructure and come back bigger and better.

 

 

New York’s Contemporary Art Evening Sales Overview.

May 2014.

 

The evening of May 12th may have been just another mundane Tuesday night in for the unsuspecting majority, perhaps sat in front of the TV catching up Made in Chelsea, or Master Chef. However, for the art world, it was the first evening which kicked off that time of year again; the time of year where record-breaking auction results inundate the headlines and conversations of art market players.

New York’s reputations as “the city that never sleeps” certainly rubbed off on us all last Tuesday. Today, over a week since the gasp and wheezes that once filled Christie’s saleroom in the heart of Manhattan, are still prominently filling dinner table chit-chat on the streets of Mayfair, LA, New York, Paris, San Paulo, Dubai, or anywhere else where the words Hirst, Rothko, and Kasuma mean something. Why? $745 million, that’s why.

Christie’s Post-War & Contemporary Art Evening Sale in New York last Tuesday racked up a near-comprehensible all-time high record for an evening sale when it raised a total of $745,000,000 ($656,630,000 excluding buyer’s premium), against the pre- sale estimates of $519.1 million to $711.6 million (without premiums) (ArtTactic, 2014). Smashing the house’s own pre-estimate and beating November’s $691.6 million sale (including buyer’s premium). The result was 7.7% higher than the last record set in November 2013, and continues to show strong demand for art works at the very top end of the contemporary market (ArtTactic, 2014).

So where is Sotheby’s in all this?

Well, much to their dismay, Christie’s came out as the clear leader again this season with total sales of $656.6 million against Sotheby’s $317.3 million ($364.3 including buyers premium), a strong but inevitably disappointing result, which fell short of its $339 millionlow-pre estimateby 5.5% (ArtTactic, 2014).

Across Christie’s, Sotheby’s and Phillips evening sales last week Christie’s accounted for 60.3% of the total evening sales value (up from 57.3% in May 2013). Sotheby’s market share this season was 29.2% down from 33.7% in May 2013. Not only has Christie’s gained further market share from Sotheby’s in the last two New York seasons, but the historically much smaller house, Phillips, has also gained market share at Sotheby’s expense, with a 10.5% market share in May 2014, compared to 9% twelve months ago (ArtTactic, 2014).

The highest grossing artists this season were Andy Warhol and Mark Rothko, who respectively raised a total of $158.9 and $119.75 million based on 7 and 3 lots. The next 5 top achievers included Barnett Newman, Jean-Michel Basquiat, Francis Bacon, Jeff Koons and Gerhard Richter (in that order), who together raised $337.05 million. Altogether, the aforementioned artists accounted for $615.7 million of the total result, or 56.6% of the aggregate sales value (but only 14.5% in terms of lots sold) (ArtTactic, 2014).

The stratospheric height of these unfathomable bids have reassured the art world that once again, the art bubble is another layer stronger. Given the dreary results of the previous week’s Impressionist and Modern Art sales, a handful of doubters were questioning the longevity of the contemporary art market. Yet, considering the leading auctioneers can so easily suck out collectors' cash in increments of $100,000, $500,000, a million, another million, and so on, there is no chance of the contemporary art market slowing down for at least the duration of 2014, let alone crashing.

International anthology "Agenda" Magazine have featured my artwork in the latest online broadsheets. Sneak preview here:

http://www.agendapoetry.co.uk/documents/Broadsheet20.pdf

http://www.agendapoetry.co.uk/documents/Broadsheet21.pdf


Check out a write up about me and my work on this great theatre review site: http://writtencrowd.co.uk/written-out-loud/  

12th September 2013

Michelle Swann  

Who? Painter, Set Designer, Post-grad - wide-thinking northern lass making her way in the smoke

Where? "In a coffee shop avoiding the finishing touches to my MA dissertation on art advisors and auction houses. So boring. Safari windows of Sir Richard Rogers’ architectural wonders are in their hundreds behind this. He’s so great."

Inspiration?

1. Willem De Kooning. At school I was always told if a drawing looked like something then it was considered “good.” I didn’t even know abstract art existed until I saw my first ever De Kooning (in a book of course) when I was around 11. When I saw the real thing in Tate Modern 12 years ago, a phenomenon occurred in my little world. His lyrical paint strokes met with my goose bumps made of pure admiration and set the path for me; from that moment on, I knew what I wanted to do, and who I wanted to be. My adoration for this man is invaluable.

2. Jean-Michael Basquiat. Do you know what is feels like to see a painting for the first time and think how have I got this far without ever seeing this? His work is so brilliantly dramatic, breaking down the boundaries between text, drawing, and painting; the artist was influenced by sports heroes, jazz legends and urban living. Choosing to live on the streets, he was a mad, mad man in the best possible way and like all the greats he died at the age of 27 through drug abuse. His work still lives on beyond belief and thank god it does because a flight to Paris to see his retrospective exhibition at the Museé d’Art Moderne was a pretty great 21st birthday present! He is also easy on the eye too which helps. 

3. Good old Yorkshire. Whether I realise it or not, my surroundings have a way of leaking into what I am painting or drawing.  Photography falls flat to me and this comes across in my work, so it is always best to draw from the real thing. I find “The City” can be too congested to let ideas flow at times so I always return to my studio in the North when I want to get serious about painting. When I am working, 60% of my time is spent standing back from my paintings deciding what works and what does not, which colours compliment others, and what I want to get out of the final image. Isolation and big vast spaces help me with this, which I guess it why most of my best works have been produced on mountains, beaches or fields. 



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