The art market appears to be going from strength to strength, with blockbuster sales being reported with increasing regularity and record prices achieved for blue chip artists at auctions and art fairs around the world. Today, it is worth around €47.42 billion (according to the latest TEFAF art market report). This represents the second best year on record for the industry, only beaten slightly by results in 2007, right before the economic crash. In light of these staggering results, there are many who are asking the question: can this upward trend continue?
The best explanation of the art market may be that it is inexplicable, which is one reason why its alchemy continues to fascinate and capture headlines. Post the economic crash, the first piece of good news came in 2012 when Edvard Munch’s The Scream sold for $120 million at Sotheby’s New York. This was soon beaten the following year by Francis Bacon’s triptych ‘Three Studies of Lucien Freud’ which sold at Christie’s in New York for $142 million, which to this day still holds the record. Surely it’s only a matter of time until the next masterpiece makes the headlines?
Current tastes are for the (relatively) shiny and new as post-war and contemporary sales dominate the market. If you’ve got the big bucks, Gerhard Richter, Andy Warhol and Jeff Koons are the artists who should be on your shopping list. Impressionist and Modern sales have been slowing down, and go back in time even further and the appetite for Old Masters appears to be dwindling fast. Up until the 1980s, paintings by figures such as Rembrandt, Rubens and Velázquez were the main income-generators for Sotheby’s and Christie’s. Since then, they’ve fallen out of favour with wealthy collectors, who increasingly want to buy instantly recognisable works by “brand” artists. Over the course of last year, worldwide auctions of Old Master paintings raised $1.4 billion — less than a single week of New York contemporary sales. This loss in value, however, could be attributed to the increasing rarity of top-tier Old Master pieces that come onto the market. In light of this, some collectors, who feel that they are being priced out of the contemporary market, are turning to lesser-known Old Masters, in the hope that these could hold their value more consistently than a currently fashionable name.
As well as changing tastes, the way in which art can be bought is evolving too. Over the past few years, there has been a concerted effort throughout the trade to make art more accessible – an inevitable reaction to the truly global nature of the art market. There has been a huge increase in the creation of online outlets as the traditionalists start to realise it may be the only way to stay in the game. The outlook is bright for online art sales with estimates that they could top €10 billion by 2020, four times what they are worth now.
For now, the trajectory of the art market appears to be going unstoppably upwards. 2013 will be remembered and cherished by global art market observers as a year that proved that there are no boundaries when it comes to the value of art. So can this upward trend continue? The real answer is that no one knows.
For the time being, the art market remains a really interesting place to invest. The important thing is to buy what you like and always try and buy the best examples in terms of quality that you can afford.