The recovery in the global art market slowed at the latest bellwether auctions of Impressionist and contemporary works where overpriced lots struggled to attract bidding, dealers said.
Expectations for two weeks of London sales had been raised by recent auction records for works by Alberto Giacometti, Pablo Picasso and Amedeo Modigliani and reports of brisk business at the Art Basel fair in Switzerland. Sellers pushed up estimates at a time when choosy buyers are now only willing to pay the largest sums for the best trophy works, dealers said.
“The auction houses had talked themselves into getting higher and higher prices,” Richard Nagy, a London-based dealer, said in an interview. “They need to be less excitable about their estimates.” Prior to the sales, surveys showed there was no room for greed or over-optimism for less-than-perfect works, with confidence still fragile. Respondents suggested that values were likely to be little changed over the next six months.
The London auctions amounted to a 421.2 million-pound ($640.3 million) test of the market, according to Bloomberg calculations. The sales began with an Edouard Manet self portrait falling to a single bid of 22.4 million pounds; a ‘Blue Period’ Picasso selling within estimate for 34.8 million pounds and a Claude Monet lily painting, valued as much as 40 million pounds, failing to sell. By the end, “buyer fatigue” set in as nervous collectors watched stock prices.
“All those top pieces were sophisticated and needed knowledge,” Nagy said of the big-ticket Impressionist works. “If the Monet had been priced at 15 million pounds to 25 million pounds, it might have made 30 million.”
The June sales at Sotheby’s, Christie’s International and Phillips de Pury & Co. had been estimated to fetch between 353.7 million pounds and 477.1 million pounds, based on hammer prices. All realized prices include auction-house fees.
Sellers of museum-quality Impressionist works had hoped bidding from Asia, Russia and the Middle East would help push prices to record levels. On this occasion, there was less buying from clients in the emerging economies, Sotheby’s and Christie’s said.
“These people know how to look after their money,” Alan Hobart, director of the London-based Pyms Gallery, said. “If they sense the market isn’t what they’ve been led to believe, they’ll sit back and wait.”
Still, selling rates never fell below 69 percent at Sotheby’s and Christie’s evening and day sales of Impressionist art.
Buying was more inconsistent during the following week’s contemporary art auctions.
All three of the most expensive works at Sotheby’s 41.1 million-pound evening sale on June 28 sold within estimate. Phillips’s June 29 evening sale -- held on a day when the FTSE 100 Index dropped by 3.1 percent -- raised 4 million pounds against a low estimate of 6 million pounds with 53 percent of the lots successful. On July 1, Christie’s day sale of contemporary works totaled a low-estimate 13.1 million pounds with 65 percent of the 318 works sold.
Prices of some contemporary artists are recovering after declining as much as 50 percent from their peak. The London sales showed buyers hesitant if sellers were perceived too be unrealistic. At Sotheby’s on June 28, Peter Doig’s 1995 to 1996 mountain landscape “White Creep” was offered with a low estimate of 1.4 million pounds, having been bought for that price by the seller at Sotheby’s in February 2008. It failed to attract a bid.
“The mood has changed,” Hobart said. “At the beginning of May, people thought the banking crisis was behind us. Then the sovereign-debt problems hit. That’s where the problem is. The markets are very unstable at the moment.”
In May, average prices at Sotheby’s and Christie’s evening sales of contemporary works in New York stood at 2.9 million pounds, more than double the 1.4 million pounds achieved last year, the London-based research company ArtTactic said. A month later in London, prices at the two houses’ evening sales averaged 903,125 pounds, a smaller increase on the 619,444 pounds set last June during the financial crisis.
In 2008, during the final phase of the contemporary-art market boom, the average price stood at 1.5 million pounds, according to Bloomberg calculations.
“In May there seemed to be strength of demand across all artists and all quality categories,” Francis Outred, Christie’s European head of contemporary art, said in an interview. “The estimates got ahead of themselves. The market is still moving in the right direction. From now on we have to exercise discretion.”
Christie’s June 30 evening sale raised a within-estimate 45.6 million pounds, the highest total for the week, with a top price of 6.8 million pounds paid for Andy Warhol’s 1963 “Silver Liz.” The London-based auction house’s equivalent auction in 2008 netted 86.2 million pounds, led by a triptych of Francis Bacon self portraits at 17.3 million pounds. No works by Bacon were offered at London auctions in June 2010.
“A lot of people thought the market was back. It isn’t yet,” said Anthony McNerney, managing director at the London- based gallery, Ben Brown Fine Arts, and a former contemporary- art specialist at Phillips de Pury. “Buyers are very sensitive to price. The auction houses need to be careful and keep their sales tight.”
(Scott Reyburn writes about the art market for Muse, the arts and culture section of Bloomberg News. Opinions expressed are his own.)
To contact the writer on the story: Scott Reyburn in London at firstname.lastname@example.org.