Art Market Alert III

Finding a niche in a declining market.

Collectors are being bombarded with offers aimed at reviving the current sluggish market. But the figures tell a different story. The buy-in ratio over the last six months has averaged 37% and auction houses are increasingly struggling to fill their catalogues. By 23 September, only 185 fine art sales had been announced for October 2003 compared to 263 a year earlier.
Investors — buyers and sellers alike — are more cautious than ever (See ArtMarketInsight of 8 September 2003). And yet, in a few speculative corners the art market can still catch fire. Price levels for certain artists have exploded over the last season, but the scope for picking winners has got dauntingly narrow. So, where were the growth niches in the first half of the year?

Some fashionable art trends have continued to make progress despite the dismal climate. Mainly, these are the preserve of connoisseurs, and inaccessible to amateur enthusiasts or speculators. But also performing well have been the Rayonist artists (such as Nathalie GONTCHAROVA whose prices have risen over 200% since the beginning of the year (see ArtMarketInsight of 29 August 2003)), the Pont-Aven School and some animalier sculptors — famous names such as Pompon, Barrye and Bugatti had already been seeing sharp price rises for the last 5 years and now less well-known and previously undervalued artists like Charles VALTON, Édouard Paul DELABRIERRE and Hercules Brabazon BRABAZON have started to score big gains.

Secondly, exhibitions or other media-friendly events seem to have triggered some huge price increases. Of the famous artists celebrating their 100th or 150th anniversaries in 2003, Camille PISSARRO (1831 – 1903), Vincent VAN GOGH (1853 – 1890) (see ArtMarketInsight of 2 April 2003) and Paul GAUGUIN (1848 – 1903) (see ArtMarketInsight of 7 October 2002) saw their prices almost double this year. Major solo shows have also proved excellent catalysts. Max BECKMANN (+56%) (see ArtMarketInsight of 5 May 2003) and Nicolas DE STAËL (+125%) (see ArtMarketInsight of 24 February 2003) made some of the biggest gains in January-July. It should be pointed out that, for some of these, prices were bouncing back after several years of decline.

Lastly, some prices and rankings have received a fillip from the break-up of prestigious collections. Fresh historic pieces are a rarity on the market. And when they appear at one-off auctions with heavy media coverage, discriminating investors rush to snap them up. Collections broken up this year included the Forbes (19-20 February 2003) (see ArtMarketInsight of 18 February 2003), Tremmel (5-6 May 2003), Lefevre-Utile (27 May 2003), André Breton (7-17 April 2003) (see ArtMarketInsight of 18 April 2003), François Arp (12 June 2003) and Gérald Bauer (22 January 2003) with positive effects on the benchmarks of their most featured artists, notably Hans ARP, Lovis CORINTH, William Powell FRITH, Wifredo LAM, Robert HENRI, Camille PISSARRO, Hermann DISCHLER, Peter DE WINT and Raoul UBAC, all of whom saw their price levels explode, sometimes doubling or tripling estimates, in the first half of 2003.

While some artists have enjoyed sharp increases, others have suffered severe declines. The market seems to lack structure and prices have rarely been so volatile. Overall, Artprice’s data shows that price volatility rose by 23% in the first half of the year. During such periods of uncertainty and fluctuations in the art business, accurate price information becomes a crucial tool for survival.

To illustrate the art market ups and downs, Camille Pissaro global indexhas boomed in the first semester 2003 while the London National Gallery celebrated the 100th anniversary of his death. Price index base January 1997 = 100

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