High-end art sales boom in 2017, but it's only a partial market rebound
13/03/2018 18:00
By Brenna Hughes Neghaiwi
ZURICH, March 13 (Reuters) - The works of great artists
buoyed the art market last year and none did more than Leonardo
da Vinci, whose 'Salvator Mundi' sold to great fanfare for $450
million in New York in November.
Global art sales grew 12 percent to an estimated $63.7
billion after two years of falling sales, said a report
published by UBS UBSG.S and Art Basel MCHN.S on Tuesday.
That still fell short of the record of over $68 billion set
in 2014 and below $66 billion achieved in 2007 before the art
market plummeted during the financial crisis.
"Industry-wide gains were driven by sales at the top end of
the market," said cultural economist Clare McAndrew, who wrote
the report.
Over the past decade, auction sales have fallen for works
priced under $1 million, making investment purchases a risky
gamble for the lower and middle price segments.
But purchases of ultra-expensive artworks soared in value,
with the study finding a 148 percent increase in total sales
value of works sold for over $10 million at auction over the
last ten years, and a 125 percent increase over just one year.
Indeed, the study found that just 1 percent of artists whose
works were offered at auction accounted for nearly two-thirds of
the total auction sales.
Art experts remain wary of speculative purchases at a time
when the world's wealthy, waylaid by political and economic
uncertainty, are eager to place cash. urn:newsml:reuters.com:*:nL8N1JC3B6
The research indicates that, like wealth -- half of which
remained in the hands of the top 1 percent in 2017 -- the art
market has become top heavy.
The Salvator Mundi painting was only recently rediscovered
after being sold at auction for 45 pounds, attributed to one of
Da Vinci's students, in 1958.
Art dealers took a gamble on the damaged and partially
covered work, paying $10,000 in 2005 before restoring and
verifying it for an $80 million resale in 2013. It was flipped
to Russian billionaire Dmitry Rybolovlev for $127 million later
that same year. urn:newsml:reuters.com:*:nL1N1O81BI
2017 also set a new record for the late American artist
Jean-Michel Basquiat whose untitled painting sold to Japanese
entrepreneur Yusaku Maezawa for $110.5 million in May.
urn:newsml:reuters.com:*:nL2N1IL048 A work by Roy Liechtenstein fetched $165 million in
a private sale.
TOP HEAVY
"Away from this premium segment, performance was not all
positive, with many businesses coming under pressure," McAndrew
said.
"This divergence in performance is a continuing concern,
particularly as the majority of employment and ancillary
spending comes from the very many other businesses in the art
trade below the top tier," he said.
The largest art markets were also those with the highest
numbers of millionaires, with the five largest markets
accounting for two-thirds of the world's millionaire population.
Research by UBS, which banks half the world's billionaires,
also found a growing engagement amongst the world's very richest
with art.
In a survey conducted with the bank's U.S.-based clients,
the world's largest wealth manager found that over a third of
the high net worth individuals — or those with personal assets
over $1 million — were active in the art and collectibles
market.
While only a third of the collectors placed emphasis on
financial return in their collecting, that increased to nearly
half for those with wealth over $5 million.
The rapid growth of China's economy and rising wealth over
the last two decades helped fuel the art market, the report
found, with China overtaking Britain as the second biggest art
market following the United States.
Further growth in Asian economies could be expected to fuel
more collecting over the next five years, it said.
(Editing by Matthew Mpoke Bigg)
((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))