A peak in the art market in 2005?

The international art market has never performed so well. The figures are record-breaking!

In 2005 the turnover for Fine Art sales exceeded USD 4 billion, vs. USD 3.6 billion the previous year, despite a practically stable volume of 320,000 lots. This incredible progression came on the back of a price increase of 10.4%* last year, following on from the 19% rise already recorded in 2004. This price inflation translated into a multiplication of sales exceeding USD 1 million No less than 477 lots went under the hammer for more than a million dollars, compared with only 393 in 2004 and 395 in 1990 at the peak of the speculative bubble. Fifty-five % of these millionaire lots were knocked down in New York.

The Big Apple—which has the lion’s share of the world market (44% of sales)—has seen prices soar at an incredible rate: +34.5% in 2005. Today in the United States, artworks fetch 27% more than in 1990! The market has never known such a boom.
By way of comparison, London buyers were much more reasonable, as prices of artwork rose by only 4.8% in 2005 in the UK, compared with 27% the previous year. That said, London accounted for 29% of world sales in 2005 and its turnover grew by 20% compared with the previous year. Furthermore, the quality of auctions in London has moved up a notch! And today, the prestigious London auctions are on a par with the strongly media hyped sales in New York. As a result, no less than 176 lots were knocked down for a million dollars in London, generating a total of USD 470 million, vs. only 142 in 2004 and 90 the previous year. Moreover, Sotheby’s London holds the record for the year: on 7 July, Giovanni Antonio CANAL‘s Venise, the Grand Canal, looking North-East from Palazzo Balbi was knocked down for GBP 16.6 million (USD 29.1 million).
The second highest record went to Constantin BRANCUSI‘s L’oiseau dans l’espace which sold for USD 24.5 million at Christie’s New York on 4 May. Another sculpture ranked in third place: Cubi XXVIII, a monumental sculpture (1965) by David SMITH sold for USD 21.25 million.

This incredible result, which doubled its estimates, reflects the huge enthusiasm of American collectors for post-war art. In twelve months, this segment of contemporary art recorded an exceptional progression of 28.2%! However this sudden surge could be very fragile because it is in fact the most volatile sector in the market and time has not yet tested the strength of its artists’ price indexes. In 1990, 28 artists under the age of 45 sold an artwork for over USD 100,000 at a public auction. The following year, only 7 of these hit the same level. In 2005 the new wave of artists pushed the figure to 49. What will the result be in 2006?

Last year marked an historic peak for the art market in New York and London (similar to that of 1990)…but who knows….? Maybe this is not really a peak……!

*calculated from auction results, expressed in dollars.