Despite Weakening Art Market, These 4 Areas Show Strength

While the art market overall has seen slight “contraction” since 2014, some areas are still showing growth.

“Our 2015 numbers were down slightly from 2014, largely because 2014 was such a spectacular year,” said Bonnie Brennan, senior vice president and senior director at Chrisitie’s Americas, during a press briefing with Wilmington Trust in Christie’s New York offices. “We’ve seen great strength in 2016.”

For the first half of 2016, Christie’s has sold $3 billion globally, down from $4.5 billion for the same period in 2015. According to Christie’s, sales volumes are down largely due a drop in supply of works of art at the highest level.

“There’s great hunger and demand for the best of the best and there’s a limited number in private hands,” Brennan said. “We are always happy when they come up, but that doesn’t happen every day.”

To illustrate the high demand, Brennan pointed to a report by TEFAF that found 28% of the entire art market was for works over $10 million in 2015.

“That’s a real demonstration of that hunger at the highest level,” she added. “And you saw that in masterpieces…some of which we sold here at Christie’s: the Picasso for $179 million [and the] Modigliani for $170 million.”

Pablo Picasso’s Les femmes d’Alger, Version O from 1955 actually set a new world auction record for any work of art, according to Christie’s, when it sold in May of last year.  

Amedeo Modigliani’s Nu couché (Reclining Nude), which was painted in 1917-1918, went to what Brennan called “sort of an unexpected buyer,” a former cab driver in China who’s building a museum in Shanghai.

Despite the reductions in sales volumes and masterpieces, Brennan still sees many strengths within the art market.

The Modigliani that sold, for example, speaks to several trends Brennan is seeing in the market: “masterpiece demand, new buyers and the importance of emerging markets in our field, and the importance of a global buyer base.”

Meanwhile, Kemp Stickney, chief fiduciary officer at Wilmington Trust, stressed the importance for art collectors to understand the market and the buyers.

“If you’re a passionate collector, you really understand the market,” Stickney said. “Not only do you understand where the market is—is it in New York? Is it in Hong Kong or London or elsewhere?—but you also need to understand where the collectors are. Is it a narrow but deep group of collectors or is it a broad group of collectors—very few of which can afford the number that you have or the pieces you’ve purchased over a long period of time?”

Here are four trends in the art investing market that have shown strength, despite a weakening overall art market.

1. New buyers buy-in.

Brennan said there’s been a “tremendous number” of new buyers entering the market. In the first half of 2016, more than 25% of Christie’s buyers were new to Chrisitie’s. New clients in the Americas increased by 22%, with the New York saleroom bringing in 21% of new buyers globally. 

“There are new people entering the market all the time and I think that’s a great sign of future stability,” Brennan said.